U.S. Economic Nationalist Alarms Over China's Industrial Policy Success Amidst Proposed Tariff-Driven Reshoring

A recent social media post by Geoff Shullenberger, managing editor at Compact Magazine and a self-proclaimed American economic nationalist, has ignited debate over contrasting economic philosophies and the effectiveness of industrial policy. Shullenberger starkly contrasted what he termed "the utter seriousness and astonishing results of Chinese industrial policy" with "the moronic babblings of hacks like Lutnick," asserting that this comparison "should be terrifying if you're an American economic nationalist (as I am)." The tweet underscores a growing ideological divide on how nations should approach economic competitiveness and global trade.

Shullenberger, known for his critiques of neoliberalism and globalism, advocates for a robust domestic industrial strategy to counter perceived foreign economic advancements. His perspective aligns with a segment of American thought that views state-led economic development, particularly China's, as a formidable challenge to U.S. economic supremacy. This stance often emphasizes national self-sufficiency and strategic industrial capabilities.

Conversely, Howard Lutnick, recently nominated as U.S. Commerce Secretary, champions a policy centered on aggressive tariffs and reshoring manufacturing to the United States. Lutnick has publicly stated his support for "across-the-board tariffs" to "equal out America's trading relationships," arguing that such measures would not cause inflation. He envisions a future where products like iPhones are made in America by robots, replacing what he described as China's "army of millions and millions of human beings screwing in little, little screws."

China's industrial policy has indeed demonstrated significant advancements in strategic sectors. For instance, its shipbuilding industry now accounts for over 50% of global output, and Chinese firms dominate electric vehicle battery exports, holding nearly 80% of the world market. These successes, often attributed to substantial state support, including subsidies and strategic guidance, highlight China's capacity for rapid industrial scaling and technological progress.

However, China's state-led approach is not without its complexities and criticisms. Experts point to challenges such as overcapacity in certain industries, potential for cronyism, and questions regarding the long-term efficiency and market distortion caused by extensive government intervention. While some policies, like those in EVs, have fostered innovation, others, such as aspects of the "Made in China 2025" initiative, have shown mixed results in terms of productivity and profitability.

The sharp divergence between Shullenberger's alarm over China's state-driven achievements and Lutnick's proposed tariff-heavy strategy reflects a critical juncture in American economic policy. The debate centers on whether the U.S. should emulate aspects of China's industrial policy or rely on protectionist measures and domestic automation to regain competitive ground, shaping future global trade dynamics.