America's new economic policy: Biden administration relies on industrial policy

America's new economic policy: Biden administration relies on industrial policy

The significant change in US foreign trade policy that took place in the rooms of the Brookings think tank marks a turning point in over 75 years of American economic policy. In his speech, US President Joe Biden's national security adviser, Jake Sullivan, explained that the previous policy of liberalization, characterized by terms such as tax cuts, privatization and free trade, had brought more disadvantages than advantages to the United States. In particular, the hope of achieving responsible action and peaceful cooperation through economic integration has not been sufficiently realized.

The US administration is now striving to reorient foreign and economic policy more closely to the interests and needs of the American middle class. This new policy includes a clear industrial policy divided into three categories: sectors essential to U.S. economic development, sectors of strategic national security importance, and sectors in which private companies are not investing adequately to achieve national goals.

Particularly in relation to China, the US government plans to strengthen its industrial policy and restrict the country's access to certain technologies in order to protect technology that can be used for military purposes. These adjustments in the US's economic and foreign policy have far-reaching effects that also affect Germany and Europe. Partner countries are expected to align their goals with U.S. goals, which could lead to a new era of economic relations.

For Germany and Europe, the changes in US economic policy represent a challenge as the world order and political dynamics change. Germany and the EU must prepare for a time when different rules and priorities apply in order to remain relevant. The EU's role in global issues will have to be redefined, as economic strength forms the basis for political and military action. In a time of upheaval and geopolitical change, it is crucial that Germany and Europe focus on strengthening their economies and associated geopolitical positions in order to play a significant role in this new era.