Reshaping industrial policy: Should the U.S. government be investing in sectors?

US-China Trade and Technology - A group of Senate Democrats is questioning President Trump's decision regarding Nvidia and AMD selling AI chips to China in exchange for a 15% revenue cut [1] - Lawmakers are concerned that this deal could compromise America's competitive edge and strengthen China's military [2] - The discussion involves the potential for industrial policy and government stakes in companies like Intel to reshape national security [2] Industrial Policy Debate - The discussion highlights differing views on industrial policy, with some arguing it has historically failed and others seeing it as necessary for national security, particularly in the semiconductor industry [4][5][7][8] - Concerns exist about relying on China for critical technologies like semiconductors and rare earth processing, prompting calls for thoughtful policy to address these vulnerabilities [8][20][21] - The debate includes the potential trade-offs of industrial policy, such as its impact on economic growth, consumer costs, and national security [10][11] Economic Perspectives - One perspective emphasizes the success of the free enterprise system in the US, citing the performance of the stock market and the "magnificent seven" companies [17][19] - Immediate expensing for capital purchases is highlighted as a positive policy for encouraging domestic industrial production [22] - Recent economic data indicates positive earnings reports, suggesting a favorable environment for investors [26]