Daleep Singh on the Need for a US Industrial Policy Playbook

Daleep Singh framed industrial policy as a response to a world that has moved far beyond the post-Cold War assumption that markets and globalization would reliably produce both prosperity and strategic stability. Drawing on his experience at Treasury, the Federal Reserve, and the Biden White House as deputy national security advisor for international economics, he argued that brittle supply chains, a hollowed-out industrial base, rising inequality, and geopolitical rivalry with China and Russia have exposed the limits of a purely market-led approach. But he was equally clear that industrial policy has a poor historical batting average when it becomes improvised or politically opportunistic. His proposed remedy is a public, disciplined framework: policymakers should define the national objective, identify the market failure, match the instrument to that failure, preserve competition rather than entrench monopolies, and specify how government support will end as markets mature. He applied that logic to current policy, saying the MP Materials deal had the right structure—mixing financing support with a 10-year offtake agreement and price floor—but should be multiplied across firms so government builds a market, not a single national champion.

Energy and clean-tech supply chains were central to the conversation. Singh argued that the clean-energy transition should not be treated as automatically risk-reducing just because it lowers exposure to oil and gas shocks; it may instead create new vulnerabilities if critical minerals, batteries, solar components, and other inputs remain heavily concentrated in China. He said the US should do more rigorous forward-looking analysis of choke points and tolerable levels of import dependence before making large policy bets. At the same time, he defended the Biden administration’s three-part strategy of building domestic capacity, partnering with allies, and using targeted tariffs to counter China’s state-backed overcapacity. He described Chinese overcapacity not simply as low-cost production, but as supply flooding strategic sectors beyond plausible global demand through subsidized credit, cheap land, uneven regulation, and other distortions that can wipe out non-Chinese competitors even in sectors—like EVs and solar—where the world ultimately needs much more output.

The discussion broadened from industrial policy to economic statecraft. Singh said the US has developed doctrines for military force over centuries but lacks an equivalent doctrine for sanctions, tariffs, export controls, and investment restrictions. He warned that overuse of these tools can undermine long-term US leverage by pushing countries to build alternatives to the dollar-based system, even if no immediate substitute exists. Reflecting on Russia’s 2022 invasion of Ukraine, he said G-7 coordination was unusually effective because the Biden administration had spent 2021 rebuilding trust with allies through concrete cooperation, from settling the 17-year Boeing-Airbus dispute to agreeing on vaccine sharing and a transatlantic data privacy framework. Still, he believes Washington should have gone further with secondary sanctions on buyers of Russian energy and stronger pressure on Chinese financial intermediaries supplying Russia’s war machine. To compete more effectively, Singh argued, the US also needs more positive tools: long-term public-private financing vehicles, potentially including a sovereign wealth fund-like strategic investment vehicle, to channel patient capital into strategic technologies from advanced geothermal to synthetic biology.