Open the newsletter to watch the White House for free

Your guide to what the American elections mean 2024 for Washington and the world

Flexibility is a good thing. We have learned that over the past two decades or so-epidemics, wars, worsening trade and climate disasters have made excessive production capacity risks to focus anywhere.

For this reason I always thought it is a good thing to have more regional contract to manufacture critical goods around the world. It is not related to enemy. It is only about not to keep all your eggs in one basket.

But to create flexibility, you need to play both attacks and defense. The Trump administration is trying to do this latter with unlawful definitions, at best. But even if the surgical tariff strategy (currently, we have a comprehensive tariff on both high and low -value parts of the economy, and the proposals that turn daily) will fail without a home game that includes the industrial policy to really promote strategic industries. Only the countries that have, and link them clearly, can successfully enhance local manufacturing.

During the Biden administration, the United States used a mixture of commercial restrictions, capital and technology, as well as local industrial policy in the form of tax exemptions, grants, subsidies and workers’ training programs, to restore decisive industries such as the production of semiconductors to America.

No one said that this would replace all factory functions that were lost to China over the past twenty years or so, but there was a clear message that the United States needed to be at least some of the ingredients that were the lifeblood of the digital economy on its soil. With complete wisdom, the European Union followed its example.

The fact that flexibility can be restored in a complex critical industry like chips In a little more than two years A case study of the Trump administration should have been a follow -up in the main areas of critical minerals to medications. But what we get is the policy that is placed in grades and myths, with some of the abdominal tariff proposals, and some national security investigations in areas that include copper, wood, chips and pharmaceutical preparations, and the proposals of home support for industries such as shipping, but without actual support to support the workforce or workforce training obligations.

None of this work – local or international – does not tell what the United States is concerned with regard to manufacturing, and why. This, in turn, creates an inconceivant manner that this does not lead to the type of investment that the White House says it wants to bring it to the United States.

Michael Weesel, a commercial expert and member of the Economic and Security Review Committee in China, says: “major public companies are looking for investment standards that are often five years or more. No one knows the period in which definitions may continue, either during this administration, or after.

“Without the industrial policies in force, the markets may not have confidence” to pour money again to the United States, especially in areas such as manufacturing or energy, which even have the longest time tables for investment.

Even if the Trump administration is clear around the place where you want to build the exact ability, it will need to go more in designing the customs tariff for protection from things such as “the reflection of the customs tariff”, when the duties end on the imported component parts to be higher than ready -made goods, and harm local manufacturers.

Likewise, you will need to schedule the risk of supply chain in more advanced ways. Donald Trump tells the American audience that he can obtain reserve manufacturing and operation within a year and a half to two years. But where will electricity and energy come from, especially if there is a tariff for suppliers like Canada?

The network system is old and resources in many places throughout America, and it takes power plants (which is short of the United States) for years to build. At the same time, no degree of regulatory restrictions will make local rock energy to be viable if the price of oil persists.

Then there are inventory issues. American companies tend to maintain a little stock on hand due to time production models. This is very important when there are sudden reprisals on rare ground minerals from China, or the export prohibited by places such as the Democratic Republic of the Congo – one of the only countries that can obtain critical metal cobalt. As one of the analysts told me, these types of disorders can collide with production in areas such as electric vehicles, medical devices and airlines. I can name 12 of these other risks, but you get this idea.

Does anyone in the White House Trump develop a 360 -degree view of all of this? I certainly don’t know, but I think no.

I hope that this administration will do what I called in a column several years ago: renting a former military expert or logistical services to be a White House level flexibility of Caesar. Physical and financial risk factors in playing are head spinning, and someone needs to start thinking carefully about how to collide.

Unfortunately, the White House appears to focus on the same old conservative recipes. Economic House Speaker Stephen Miran reduced the risk of customs tariffs and said that tax cuts and the abolition of restrictions in America’s competitiveness are more competitive in the world. This seems less like a flexibility plan and more like thinking about wishing.

rana.foroohar@ft.com