No More Reacting: An Argument for a Clean Industrial Policy—and Against Competitiveness as an Organizing Economic Principle

In the coming years, due to its alienation of historic friends and allies,¹ abandonment of traditional forms of cooperation,² and shortsighted policy decisions,³ the United States will face a choice between isolation and collaboration, between retrenchment from a world increasingly shaped by others and progress alongside like-minded partners. A better life for working Americans requires choosing collaboration and progress. This means rejecting outdated distinctions that suggest that pursuing domestic economic success cannot occur alongside strong multilateral engagement, or that creating and sustaining high-quality jobs somehow requires limiting climate action.

To succeed in a future threatened by a warming climate, contested supply chains, and advancing inequality, Americans will need a government that orients its policymaking around the economic and security imperative of stopping the climate crisis and bringing prosperity to working people and their families. This means the country should appropriately and constructively invest in its people—not alongside (or worse, in competition with) policies meant to address the climate crisis, but as part of a robust climate strategy.

This investment must happen in the care economy, education, infrastructure, and other spheres. But as the Trump administration eviscerates⁴ domestic progress on the climate crisis—historic progress⁵ that created hundreds of thousands of good-paying, community-sustaining jobs—there must also be a wholehearted effort to rethink and expand the solution set for climate change and working people. In short, the United States requires nothing less than a fully reimagined clean industrial policy—one that is rooted in the values of supporting American workers, addressing the global climate crisis, eradicating toxic pollution, and ending environmental and human rights abuses.

A critical tool of macroeconomic policy, industrial policy⁶ is how a government supports an industry, whether through trade policy, direct incentives or investment, and/or research and development. Industrial policy has been deployed to build up core industries that are important⁷ to domestic identity⁸ and the economy, to lift⁹ nations out of the depths of depressions and recessions, and to rebuild¹⁰ from the ashes of war. It is a hallmark of developing nations striving to achieve middle-class livelihoods for their people. A cleanindustrial policy¹¹ achieves this while securing healthier communities, sparking domestic clean technology expansion, and making major strides in the fight against the climate crisis.

Done right, a clean industrial policy should strengthen the economy, make everyday life more affordable for working people, and drive climate progress—at the same time recognizing that these three seemingly unique objectives are tied tightly together. It would embody national self-sufficiency and global collaboration. To achieve this, the United States must first rethink its obsession with competitiveness—the idea that one nation succeeds at another’s expense or that countries must compete in a zero-sum world for resources, power, or advantage. Instead, the country must reorient itself toward sufficiency, innovation, and collaboration. The goal is not to be better than other nations, but rather for the United States to pursue policy that makes the country the best it can be.

The United States then needs to be clear about its priorities, following a dedication to the nation’s values, by developing a rubric to identify which industries to back with strong investment and industrial policies. Finally, the country needs to build and develop a clean industrial policy, combining industry-specific focus and broad systemic changes to power production, workforce development, and international economic engagement.

Clean technologies, like so much else, have become enmeshed in zero-sum concepts¹² of competitiveness to the detriment of the climate and the American worker. Sadly, this is not a new story. Like JNCOs,¹³ crop tops,¹⁴ and grunge,¹⁵ an unshakable desire for economic competitiveness with—or even dominance over—China and other nations in global supply chains is back in vogue.¹⁶ This obsession is often at the expense¹⁷ of other aims¹⁸ that may better support the American people, such as better wages and working conditions and less pollution.

Ever since the reverberations from China’s accession to the World Trade Organization and free trade agreements such as the North American Free Trade Agreement started leaving community-sized holes¹⁹ in the U.S. economy, a focus on competitiveness has become one of the few issues to still hold weight across the political spectrum.²⁰ Donald Trump’s entry into politics only amplified the issue to the point where competitiveness itself has seemingly become a value. A seemingly small but useful example is the U.S. Department of Energy’s (DOE) solar program, which has a “manufacturing and competitiveness team.”²¹ The DOE website highlights “competitiveness success stories.” The stories are positive and, in many cases, inspiring, highlighting ingenuity, job creation, and economic benefit. But why does the program center on competitiveness?

Back in 1994, American economist Paul Krugman²² argued that concerns about competitiveness are often unfounded. He noted that defining broad economic problems in terms of competitiveness is attractive, but obsession with competitiveness is wrong and dangerous because it can—and often does—lead to bad policymaking, such as by launching a reckless trade war.²³ It is not a stretch to apply this line of thinking to today’s political discourse. Just this past year, European economist Patrick Kaczmarczyk²⁴ unearthed these arguments to effectively critique the European Union’s heated debates over productivity, growth, and standards of living, especially as they grapple with net-zero goals and China’s—and to a lesser extent the United States’—encroachment deeper into their clean tech supply chains.

The United States needs to go through its own introspection on whether the grips of competitiveness have truly served the nation well. Competition should only serve discrete purposes based on actual values that produce quality outcomes, such as cleaner air, a better standard of living for Americans, and effective military capabilities. Yet, the United States has seemed to elevate competitiveness as a value and goal in and of itself. As Krugman noted, “[t]he idea that a country’s economic fortunes are largely determined by its success on world markets is a hypothesis, not a necessary truth … And the hypothesis is flatly wrong.” Both Krugman and Kaczmarczyk explain that productivity and competitiveness do not—and almost certainly should not—have correlation. The former is a true value of a nation’s economy that directly affects working and living standards. The latter is a nation versus nation measuring stick modeled off of corporate competition that often operates on the assumption that success in one nation means failure in another. That assumption is functionally not true, as Krugman and others—from a business perspective²⁵ to a focus on global justice²⁶—have noted.

The United States should not define its economic success by comparing itself with its competitors. Doing so permits competitors to define U.S. actions and standing, rather than allowing the United States to act in its best interest. When President Franklin D. Roosevelt created the New Deal, he did not do so in order to outcompete Europe; he did it because²⁷ Americans needed jobs, opportunity, and faith in the future. Policymakers and leaders should not shy away from this approach to policymaking. Instead of embracing the efficiency or cost-basis methodologies that business CEOs use to judge their firms against competitors, policymakers should be clear that they want to deploy the tools of government to improve the lives and livelihoods of the American people independent of what other governments do in their countries. The question is not “how do we become more competitive,” but rather “what is best for our people—now and into the future?”

This is not out of step with the views of the American people, either. The Council on Foreign Relations and Morning Consult²⁸ conducted a poll in January 2026 digging into people’s views on the purpose and impacts of trade. The toplines included that most people want balanced results within a fair international system, preferring cooperation to confrontation. At the same time, a large percentage of people value the production of goods such as energy, medicine, and automobiles in the United States, while large majorities believe that China and the United States should collaborate on “strengthening and modernizing manufacturing for mutual economic growth” and “leading global efforts to tackle environmental challenges and combat climate change.” A values-based focus on domestic production alongside a rededication toward collaboration would seem to fall in line with these results.

The United States needs to deploy an industrial policy focused on a few select values: supporting American workers, addressing the global climate crisis, eradicating toxic pollution, and ending environmental and human rights abuses. Economic decisions, particularly those about which industries to support and build up, should take these core values into consideration. Unlike a haphazard demand for the United States to compete on each and every product and widget produced in the world, a strategic, values-based approach will lead to better outcomes.

To reassert its responsibility in fighting the climate crisis, the United States needs to organize its federal policymaking and investment apparatus to deploy a comprehensive clean industrial policy for key industries. The federal government should determine a process for identifying which industries, both in construction and manufacturing, meet the threshold for support by utilizing a rubric made up of core values centered on American workers and environmental, community, and global impact. Questions that this rubric can ask include:

• Does this industry provide a significant economic foundation for working people across the country?
• Will this industry play an important role in the world’s transition to a global clean economy?
• Are products associated with this industry produced in places that exploit people and the environment? Will domestic support for this industry reduce exploitation of people and the environment overseas? Can support reduce and preferably eradicate toxic pollution from this industry?
• Is this industry critical for the nation’s security?

Answers to these questions, and related ones, should create clarity on which industries would require major federal intervention. For example, the steel industry provides a significant foundation for working Americans, as the industry directly supports more than 84,000 people²⁹ and indirectly contributes to millions of jobs.³⁰ It is also critical for the nation’s security, as it produces an important percentage of products devoted to the military. The industry is connected to the climate crisis because infrastructure needed to build the global clean economy requires³¹ steel. However, steel is also a major contributor to the pollution that causes climate change, and enacting a clean industrial policy would both help to decarbonize the industry domestically and spur broader global decarbonization efforts. Finally, steel has a complicated, and often problematic, global supply chain that includes forced labor³² and extensive environmental degradation³³ in multiple places across the world. Following up these answers with an industrial policy would give the United States a once-in-history opportunity to recreate the domestic steel industry as a driving force of the clean energy economy. The automotive industry³⁴ meets many of these same criteria.

The industries supplying components for the energy grid—notably transformers, inverters, and transmission cables—are another example where values-based questions can inform good policy. A secure grid³⁵ will require the ability to produce the necessary goods in a timely fashion and at scale. This could lead to large growth in economic opportunity from the production of these goods and in turn to expansion in jobs and community support. An advanced energy grid is needed for an uptake in clean energy, and parts of this industry have been mired in problematic labor and environmental practices. Energy storage follows a similar pattern, though with even stronger concerns on environmental and human rights abuses³⁶ in the supply chains.

The U.S. federal government, alongside state and municipal governments, should implement a comprehensive, long-term clean industrial policy. The policy should be flexible and multifaceted and guided by the answers to the values-based questions above. It should also seek to secure and strengthen industries that already exist in the United States that are deemed valuable to the nation’s economic future (e.g., steel and automobiles) and that build true opportunities for industries core to present-day and future value chains (e.g., grid scale batteries, electrolyzers).

The United States has long employed so-called “industrial policy,” using tools such as investments, subsidies, trade enforcement, and tax credits to build and strengthen sectors deemed important to the country’s security, economic stability, or future. For example, agriculture³⁷ and the military³⁸ have been beneficiaries of different versions of industrial policy since the founding of the country. Other nations have also enacted industrial policy, such as France for its aviation industry,³⁹ South Korea for electronics,⁴⁰ Brazil for sugar⁴¹, and, most pressing and recent, China for steel,⁴² solar panel components,⁴³ and electric vehicles.⁴⁴

In spite of recent pullbacks on climate policy—including repealing the endangerment finding,⁴⁵ withdrawing⁴⁶ from the landmark climate treaty and leading scientific body studying the climate crisis, and recommitting to fossil fuels⁴⁷ while obstructing clean energy⁴⁸—a rededication to a clean industrial policy offers the clearest path for building and sustaining a strong economy that can also help people live affordable lives.

If the United States is going to produce goods in sectors of strategic value—sectors that, if left only to the market, would likely develop elsewhere with disregard to the values laid out above—then it must bring to bear policymaking tools that will ensure their growth and development occurs in the country. This is particularly true in manufacturing, a sector⁴⁹ that still supports millions of people, countless communities, and multiple other industries with employment, tax revenue, and investment. In order to maintain a healthy, vibrant, and prosperity-creating manufacturing sector in the United States, there will need to be a comprehensive strategy to identify core sectors to support and to implement policies and investments. Moreover, heavy manufacturing accounts for nearly one-third⁵⁰ of global greenhouse gas emissions, and the United States can and should play a role in decarbonizing these sectors, both because this is a climate imperative and because the country’s steel, chemicals, aluminum, and cement industries can survive—and hopefully thrive—in a global net-zero economy.

A U.S. clean industrial policy should take into account the economic calamity⁵¹ and regulatory wasteland⁵² left by the Trump administration and should explore various tools for utilizing and leveraging state support for key industries. It should ensure that working people in these industries benefit by receiving full access to collective bargaining, training, and high-quality wages and benefits.

A clean industrial policy should be tailored for each industry to ensure that its specific needs are efficiently and effectively targeted and that decarbonization is integrated into a broader modernization effort. Yet, some elements of the policy can and should have a broader cross-industry impact. These can include:

• An office of critical industries⁵³ to analyze current economic needs and capacity. Such an office should also examine future trends to offer recommendations on how to support key existing industries and gain a foothold in new and budding ones.
• A public power authority for heavy industry that builds and operates clean, firm power production facilities for critical heavy industry. Designed off of the Tennessee Valley Authority⁵⁴ construct, this new entity would utilize public support to solve one of the core costs of heavy manufacturing—energy production—while ensuring that ratepayers avoid additional burden.
• An American industrial bank that provides financing to help domestic manufacturing firms modernize their production techniques, purchase new equipment, and decarbonize their production. Similar to other green banks,⁵⁵ this entity would focus on providing strategic funding to small- and medium-sized enterprises, helping prepare a broad cross section of American industry for a cleaner future while also lowering the emissions profile of the largest emitting industries through targeted, strategic investment.
• A multilateral approach to climate and trade⁵⁶ policy that relies on collaboration to develop a coalition of willing nations to establish values-based trade barriers, such as those that help advantage low-carbon producers, as well as those that meet the highest standards for labor rights and working conditions.
• An expanded commitment to manufacturing workforce development and mandated job quality standards for manufacturing. The United States will require additional funding and possible programmatic changes to expand the breadth and scope of manufacturing workforce development. In addition, incorporating a workers’ right to join a union alongside providing appropriate wage and benefits will ensure that the jobs created and supported by a clean industrial policy are high-quality.

For American workers, such a clean industrial policy would make clear that their government is investing in them—not because of the need to outcompete China but because they deserve safe, fair, and prosperous lives. Indeed, too often the goal of simply “outcompeting” incentivizes companies and the government to think of workers as a mere input⁵⁷ that can increase productivity or efficiency—a calculation based solely on profit that is hurt when workers’ compensation and benefits improve.

Determining which industries should be supported by a clean industrial policy means that there will be industries or parts of industries that would not receive targeted government support. Thus, those industries may not take hold in the United States, and that is OK. If the United States commits to the core values of supporting American workers and protecting the environment, then working people can thrive and the nation’s security can remain strong while it relies on countries around the world for some products and services.

Finally, the new U.S. clean industrial policy needs to be shaped around collaboration with nations across the world as they seek to put forth their own industrial policies, and it should be developed alongside a progressive vision for trade policy. At the January 2026 meeting of the World Economic Forum in Davos, Canadian Prime Minister Mark Carney spoke to world leaders of the false promises of the rules-based global order and the subjugation of nations who, on their own, are not as powerful as the great powers in the world—certainly referencing the United States.⁵⁸ Carney laid out the need for middle-income nations to build power among the powerless and to do so based on values. He wound up his call to action by quoting European Commission Director-General for Trade and Economic Security Sabine Weyand⁵⁹ in noting that “[n]ostalgia is not a strategy.”

And while nostalgia may not be a strategy, history can be a guide. There is historical precedence for a fundamental rethinking of economic policy. In the 1950s,⁶⁰ following World War II, a group of nations that had just recently been on opposite sides of a bloody conflict decided to work together to rebuild. They did so as an antidote to zero-sum competition and to collaborate on behalf of their citizens who had just lived through the terror and destruction of the war. The European Coal and Steel Community⁶¹ set aside fierce tension over core resources between six nations, including France and Germany, and chose cooperation, pooling resources and sharing the benefits broadly among people. That was a different time with different rubble to sort through, but the lessons of plurilateral and multilateral collaboration, economic prioritization and sufficiency, and a robust industrial policy toolkit ring true today.

The European effort at integration directly responded to the most pressing challenges of the day: the need to ensure lasting peace and stability and the need to develop an industrial base capable of supporting the prosperity of Europe in the face of an assertive Soviet empire on its border. Today, the challenges are different—yet remarkably similar—as the world grapples with the climate crisis, exorbitant inequality both within and between nations, and supply chains that create problematic dependencies. While the challenges are different, Europe’s experience in the 20th century can guide a U.S. government focused on self-sufficiency and global coordination amid a worldwide clean economy transition. This should be the post-Trump world, where leaders let go of the competitiveness obsession and focus on providing for American workers and embracing multilateral collaborations.

In his Davos speech,⁶² Prime Minister Carney referred to a “collective investment in resilience.” This phrase captures the notion that each nation should have the opportunity to build its own climate-conscious path toward sufficiency while forging functional economic relationships. This is especially true for those industries that are not part of domestic clean industrial policies. Doing this thoughtfully will still require a commitment to values-based trade enforcement, ensuring that bad actors do not harm working people. It also necessitates new plurilateral and multilateral efforts built around shared values and causes, such as fighting the climate crisis.

The United States turned away from reasonable discourse and good policy on climate change and the economy in 2025. The advancements made in the preceding years to solve the global climate crisis—and stabilize and strengthen domestic manufacturing and the economy writ large—have either halted or been reversed. So far, the results are unsurprising: a distinct lack of productivity and growth, industrial job losses, and a clear stagnation and signs of shrinking in key industries. Above all, the failed prioritization of competitiveness must end and give way to an era where the United States prioritizes real values such as supporting working Americans and protecting the environment—recognizing that the two are tightly linked together.

A clean industrial policy would ensure that a strong economy provides opportunities and a stable foundation for people and communities. It would do so by strategically identifying and then building out key industries that are central to stopping the climate crisis and ensuring that the United States domestically produces goods critical to the prosperity of its people. It should ensure that the build-out of these industries utilizes standards that value high-quality, family-sustaining jobs. Implementing such a policy would equally require an understanding of how the United States fits into the global ecosystem of burgeoning clean technologies. As opposed to a focus on establishing dominance, it should focus on how the United States can coordinate and collaborate across the world—meeting the needs of Americans and of others as well.

The United States must not simply react to the dismantling of climate action and the difficulties associated with the increasing cost of living. The federal government can chart a proactive path that addresses the hardships facing working families, tackles the climate crisis, and sustainably strengthens the American economy, thus resulting in a strong economy that delivers affordable lives for working people while fighting the ravages of climate change.

The authors would like to thank Akshay Thyagarajan, Allison McManus, Angelo Villagomez, Bianca Serbin, Christian Rodriguez, Emily Gee, Frances Colon, Ilana Solomon, Jamie Friedman, Robert Benson, Trevor Higgins, and Trevor Sutton for their contributions to this report.