Trump administration adopts East Asian-style industrial policy to secure tech supply chains

Since taking office, the Trump administration has shifted toward an industrial policy that copies East Asian state-led models, moving beyond tariffs to direct government investment in sectors like semiconductors, AI and rare-earth minerals. The government now holds equity in overseas critical-mineral companies and extracts a portion of revenues from domestic chip makers such as Nvidia and AMD. Scholars connect the approach to early American industrial policy and to the proven success of China, Taiwan and South Korea, which use subsidies, state banks and geographic clusters.

Former CHIPS program director Mike Schmidt says the change reflects a reassessment of China as a strategic competitor and a need to onshore supply chains. Critics warn that the increasingly personalist nature of deals raises corruption risks. Secretary of State Marco Rubio framed the effort as a national-security imperative to dominate future technologies.