U.S. National Security Adviser Jake Sullivan defends Biden’s industrial policy

U.S. National Security Adviser Jake Sullivan. File
| Photo Credit: Reuters

U.S. National Security Adviser Jake Sullivan defended the Biden administration’s industry and technology policy, saying that it had not been “walking away from a positive sum view of the world”. His remarks come less than two weeks from a cut-throat presidential election in which Mr. Biden’s successor in the race, Vice-President Kamala Harris, is broadly expected to follow Mr Biden’s industrial policies.

Her opponent, former U.S. President Donald Trump, has said he will rely significantly on import tariffs as a principal tool of economic policy.

Mr Sullivan’s remarks were made at the Brookings Institution in Washington DC, returning to the think-tank where he had laid out the Biden administration’s ‘small yard, high fence’ approach to safeguarding U.S. industrial and technological interests in 2023.

“We continue to believe deeply in the mutual benefits of international trade and investment, enhanced and enabled by bold public investment in key sectors, bounded in rare but essential cases by principled controls on key national security technologies, protected against harmful non market practices, labor and environment abuses and economic coercion and, critically, coordinated with a broad range of partners,” Mr. Sullivan said.

Part of the context for his remarks, included the administration’s Inflation Reduction Act (August 2022), which provides for up to a trillion dollars in investments in U.S. green energy, transport and allied sectors over the next decade. Some U.S. trade partners had complained that this was America being protectionist.  Other laws and policies to shift the balance in manufacturing of cutting edge technologies include the CHIPS and Science Act, which provides for over $50 billion to encourage U.S.-based manufacture of semiconductor chips.

Mr. Sullivan emphasised that the U.S. was not walking away from international trade and investment. If the U.S. and its partners did not invest, China would dominate supply chains and could weaponise dependencies on it, according to Mr. Sullivan.

He criticised China for over-producing and dumping goods on the world market.

“To prevent a second China shock, we have had to act,” he said. “That’s what drove the decisions about our 301, tariffs earlier this year,” he added, referring to higher tariffs on some green technology, medical equipment and steel from China, that kicked in last month.

Part of the U.S. approach was to encourage its partners to invest in their own industries , he said, as he cited India’s Production Linked Incentive scheme and the Japan’s green transformation policy.

It would be a mistake, Mr. Sullivan said, for the U.S. to go back to a Cold War approach of no trade among geopolitical rivals, as he emphasised the ‘small yard, high fence’ approach. “That means being targeted in what we restrict, controlling only the most sensitive technologies that will define national security and strategic competition,” he said.

Mr Sullivan called for the U.S. investing in international organisations such as the World Bank and International Monetary Fund, as a way to enhance investments in developing countries.