Industrial Policy

Industrial policy is how the U.S. government tries to steer the economy by supporting certain industries, shaping what gets made at home, and influencing where businesses invest and build factories.

It can include subsidies, tax credits, tariffs, public research funding, and government procurement. These tools are often used to strengthen sectors viewed as strategically important, such as semiconductors, advanced manufacturing, and clean energy.

In practice, industrial policy can affect everything from supply chains and factory jobs to which products qualify as Made in America. Supporters say it can improve competitiveness, while critics warn it can distort markets or backfire if poorly designed.

Recent U.S. examples include the CHIPS and Science Act and the Inflation Reduction Act, which direct major incentives toward domestic technology, manufacturing, and energy production.