Biden's Incentives for Advanced Manufacturing Fall Short

Muted Impact of Foreign Financing on Corporate Investment

Foreign financing played a minimal role in corporate investment in the US last year, accounting for only 0.6% of the total. This suggests that President Biden's recent tax breaks and incentives for advanced manufacturing have had a limited impact on attracting foreign investment.

Subsidy Paradox

The lack of significant foreign investment raises questions about the effectiveness of the CHIPS and IRA laws, which aim to encourage foreign firms to invest in the US. If these subsidies have not had the desired effect, it challenges the US's stance against subsidies in trade negotiations and cases.

Strategic Concerns

The muted response from foreign investors highlights the need for the US to address its allies' concerns about increasing risk and vulnerability. By partnering with allies and addressing their security concerns, the US can strengthen its position in trade negotiations and advance its strategic interests.