Industrial Policy and International Trade (CRS Report for Congress)
| Release Date |
Revised Aug. 9, 2024 |
| Report Number |
IF12119 |
| Report Type |
In Focus |
| Authors |
Andres B. Schwarzenberg |
| Source Agency |
Congressional Research Service |
| Older Revisions |
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Summary:
Supply-chain vulnerabilities revealed by the COVID-19
pandemic have intensified debate in Congress about the
proper role of the government in the U.S. economy. The
debate also reflects growing concerns about how some
foreign governments use state support and guidance to
boost their industries, thereby potentially causing the
United States and others to lose global market share and
competitiveness. China’s statist model of economic
development, for example, relies on a comprehensive
industrial policy that nurtures a wide range of strategic and
emerging industries through government measures,
including subsidies and protection against import
competition. The scope and scale of these market-distorting
practices can create an uneven playing field for U.S. firms.
Concerns also exist about the extent to which the United
States lacks production capacity in certain industries and
relies on imports considered essential to public health and
national security. Legislative activity in recent years has
focused on providing a greater government role and more
coordinated approach to U.S. industrial development.
Some stakeholders criticize these measures as a
departure from the more market-led approach to the
industrial sector that the U.S. government adopted in the
1990s and generally applied over the past few decades.
Such a departure, they argue, could trigger a spiral of
industrial subsidies and increased protectionist measures by
other countries, potentially adversely affecting global
economic growth and the rules-based trading system.
