Miles Sklare

October 18, 2025

On his campaign trail last year, President Trump claimed that if elected, he would break with the economic programs of President Biden, saying:

“On day one of my new administration we’re going to throw out Bidenomics and we’re going to replace it with MAGAnomics … I will impose an immediate moratorium on all new spending grants and giveaways under the Joe Biden mammoth socialist bills like the so-called Inflation Reduction Act. We’re going to save all that money. It’s not helping you at all.”

Despite his campaign promise of a departure from Biden’s industrial development policies, his administration has made various equity investments into strategic industries–such as semiconductors, steel, and rare earth minerals–utilizing funds from Biden-backed statutes such as the CHIPS and Science Act, which he previously disparaged as a “horrible, horrible thing.” [2]

To help understand the Administration’s recent stock purchases, it is useful to review elements of what Bidenomics was, with respect to how it related to what many pundits term the ‘New Cold War’ with China. Former Treasury secretary Janet Yellen summarized the pillars of China-related Bidenomics in a 2022 speech, stating:

“The second critical impact of the Biden Administration’s modern supply-side agenda is to improve American economic resiliency … We have become too vulnerable to countries like China …[creating] national security risks … This begins with two sectors that are core to 21st century resilience: semiconductors and energy.” [3]

Bidenomics sought to use the tools of state-led economic development to bloom domestic capabilities that would end manufacturing dependency on China, mainly related to critical military goods like semiconductor chips and steel. Biden positioned his policies–CHIPS and Science Act, Inflation Reduction Act, Bipartisan Infrastructure Law–as a path to reposition the federal government as an agent of industrial development and equitable growth that would work to ‘reshore’ a manufacturing sector–whose unionized workforce had been a key Democratic Party electoral base. The motivation towards this drive stems from the effects of the rise of China as both a global manufacturing giant–in the place of the US–and also a military challenger to US allies in the east Asian region. ‘How can the US sustain a war effort against a country that it has outsourced its steel manufacturing to?’ is the obvious national security question that is recognized bipartisanly as an area requiring redress.

President Trump too, made a central pillar of both his campaigns and presidencies an effort to reshore manufacturing and reestablish the possibility of a family-supporting income from factory-related employment. Trump’s approach, however, was less oriented towards public investment into plants and more towards an import-substitution program through high protective tariffs. Actual trade and industrial policies under the first and second Trump administrations have proceeded as pragmatic dealmaking, not so much as sustained and consolidated tariff policies. More recently, many of the ‘Liberation Day’ reciprocal tariffs against a wide range of the United States’ major trading partners have been rolled back after negotiations.

Trump’s tariff policy has looked more like the negotiating strategies outlined in his book The Art of the Deal; threats of high tariffs are utilized to bring countries to the negotiating table, securing promises of greater American importation and preferential market access in return for lower tariff rates. This dynamic secures for already established American exporters superior, but temporary, market positions, but it does little to re-industrialize the American economy. Tariffs utilized as a dealmaking tactic, instead of an unremitting policy of state-led redevelopment, appear to be a hallmark of Trump’s industrial policy.

However, recent stock purchases have aligned Trumpian economics with Bidenomics. The Republican federal government has become the largest shareholder in the rare earth materials company MP Materials, assumed a ten percent ownership stake in Intel, a major U.S. semiconductor producer, utilizing funds from the CHIPS and Science Act, and approved the Japanese acquisition of U.S. Steel in return for a promise of a ‘golden share’ of equity ownership to the federal government, and entered into talks to take an ownership stake in the major lithium mining corporation Lithium Americas. These policy moves mirror closely Biden’s efforts to boost government engagement in the economy to counter China in areas critical to national security. Both subsidy programs and direct public ownership represent a federal commitment to the stability and growth of the enterprises in question. Instead of using blanket tariffs to reconstruct strategic sectors of American industry, the Trump administration has invested in specific areas of the economy, committing to the continued development of domestic semiconductor facilities, rare earth mineral access, and steel production. This orientation towards longer term management of productive development through direct stake-holding is also reflected in the President’s recent comments criticizing corporations’ practice of disclosing their finances to investors on a quarterly basis, suggesting that it leads corporate executives to prioritize short term gains for shareholders over longer term development of the company and its productive capacity. 

The basic goals of both Biden- and Trumpomics can find much of their origin in the so-called ‘China shock’ the United States suffered from, following the entry of the People’s Republic into the World Trade Organization in 2001. Having rapidly industrialized in the former two decades, China’s WTO membership guaranteed it access to the US market, massively boosting comparatively cheaper Chinese tradable exports to America. The result was the loss of millions of manufacturing jobs in previously factory-dominant regions such as the so-called ‘Rust Belt’. Political scientists’ research has found a strong and positive statistical relationship between the extent of Chinese import penetration and resulting job loss with shifts towards larger Republican vote shares–especially in deindustrialized areas–eventually culminating in President Trump’s election victory in 2016. [4] 

The open and unhampered trading and capital market environment the US subjected itself to between the 1980s and late 2010s did not globalize free trade. Rather, it allowed the American economy to be heavily influenced by the industrial policies of foreign trading partners like China. Beijing-led export-oriented industrialization in China saw it grow into the ‘world’s factory’, at the cost of other countries’ manufacturing sectors. China has suppressed domestic consumption in its home market, benefiting its exporters, but the effects of this policy have not been contained to China. The resulting import penetration in the US and its adverse employment effects can largely be attributed as the reasons for the turn away from trade liberalization and the return of protectionism and dirigisme under Trump and Biden.

However if ‘reshoring’ and ‘reindustrialization’ of the American economy is something desired bipartisanly these days, neither the actually-instituted programs of Biden or Trump would be enough. The decision of a private business to construct and operate a manufacturing plant is a multi-decade commitment with deeply uncertain prospects for a good rate of return. Both Biden and Trump have left unaddressed the fundamental root of US manufacturing decay; the rise of the global dollar.

As the hegemonic world currency, the value of the dollar has appreciated over the last few decades, rendering American exports expensive and uncompetitive relative to other countries’ goods. The result is that American banking corporations that manage international dollar flows see their business prosper as the dollar strengthens, while the manufacturing ones close down more plants in the face of impossible competition. Biden’s structured subsidy programs certainly crowded-in private investment into targeted sectors like automobile and semiconductor manufacturing, but failed to expand either the share of manufacturing in overall US economic activity, or of manufacturing employment in overall US employment. Trump too has failed to revitalize a wider range of the industrial sector with his always fluctuating tariff rates, with small clusters of manufacturers being protected by tariffs, but the overall trend of American industrial decline continuing. Tariffs that operate as threats to be negotiated down within months or even weeks or their announcement will not push autarkic development of domestic manufacturing; it will only create temporary positions of advantage for established exporters. Any serious attempt by the President to reindustrialize must first offset the debilitating effects of dollar hegemony on American industry. However Trump does not seem interested in that, instead threatening countries that move away from the dollar (which would depreciate its value, boosting US manufacturing exports) with one hundred percent tariff rates [5]. Critics reasonably argue that Democrats are mistaken to believe that simply financing the construction of a few electric vehicle and chip fabrication plants is enough to convince blue-collar workers to move back into their electoral camp. Bidenomic policies did not create strong enough interest groups–i.e. revitalized union workers, industrial executives^*–to sustain the policies on a broad scale.

Reshoring requires a dedicated developmental policy, not discretionary spending packages or volatile tariffs. Various remedies have been offered ranging from taxation of capital inflows to the establishment of a public industrial investment bank which could redirect capital inflows towards manufacturing development, but outside of limited bill proposals, no serious solution has been introduced in Congress. While the policy schemes of Trump and Biden can and have built regional nodes of high-value added manufacturing in critical areas of production which can give the US an edge over China, they will not fundamentally alter the landscape of the American economy in favor of greater manufacturing dominance. 

* I caveat here as many manufacturing business owners and executives have been deeply important in lobbying both local Republican lawmakers and the President himself to keep in place various Biden-era subsidies, but this specific example does not buck the larger trend I mentioned.

Photo Credits: By President Joe Biden – [1], Public Domain, https://commons.wikimedia.org/w/index.php?curid=133748548

Works Cited

[1]: “Donald Trump Wants to End Bidenomics Despite Record Job Growth,” Wisconsin Independent, accessed September 14, 2025, https://wisconsinindependent.com/economy/donald-trump-wants-to-end-bidenomics-despite-record-job-growth/.

[2]: David Shepardson and Alexandra Alper, “Trump Wants to Kill $52.7 Billion Semiconductor CHIPS Subsidy Law,” Reuters, March 5, 2025, https://www.reuters.com/technology/trump-wants-kill-527-billion-semiconductor-chips-subsidy-law-2025-03-05/.

[3]: Janet L. Yellen, “Remarks on Modern Supply-Side Economics,” U.S. Department of the Treasury, September 8, 2022, https://home.treasury.gov/news/press-releases/jy0939.

[4]: Autor, David; Dorn, David; Hanson, Gordon; and Majlesi, Kaveh. “A Note on the Effect of Rising Trade Exposure on the 2016 Presidential Election: Appendix to Autor, Dorn, Hanson, and Majlesi ‘Importing Political Polarization? The Electoral Consequences of Rising Trade Exposure’ (Appendix, Rev. March 2, 2017). MIT Department of Economics. Accessed September 27, 2025. https://economics.mit.edu/sites/default/files/publications/ADHM_Politics_Appendix_TrumpVote_corr_Aug2017.pdf

[5]: “Trump Threatens BRICS Nations with 100% Tariffs If They Undermine Dollar.” Financial Times, accessed September 27, 2025. https://www.ft.com/content/18b3d51d-1e4b-4189-bae2-c31248b6526b