Sullivan Defends "Washington Consensus"

White House National Security Adviser Jake Sullivan defended new US incentives to encourage domestic manufacturing of semiconductors and clean energy technologies, saying they are needed to counter China.

He downplayed criticism of the policies from US trade partners who are calling them discriminatory industrial subsidies, saying that the policy will create stronger manufacturing partnerships and supply chains with allies.

“The idea that a new Washington Consensus, as some people have referred to it, is somehow America alone or America and the West to the exclusion of others is just flat wrong,” he told an audience at the Brookings Institution.

“This strategy will build a fairer, more durable international economic order for the benefit of ourselves and for people everywhere.”

Benefit to Allies
The Administration is working with close allies to mitigate their concerns about manufacturing

incentives in the so-called Chips and Science Act and the Inflation Reduction Act. Most recently, President Biden and South Korean President Yoon announced plans to work together on chips and electric vehicles and batteries manufacturing. At a joint session of Congress yesterday, the Korean President offered a list of Korean investments in US manufacturing.

In his remarks, Mr. Sullivan said that while the Administration wants to beef up US manufacturing, not everything can be made domestically, and that is where allies can benefit.

“We will unapologetically pursue our industrial strategy at home – but we are unambiguously committed to not leaving our friends behind,” he said. “We want them to join us. In fact, we need them to join us.”

He continued that “creating a secure and sustainable economy in the face of the economic and geopolitical realities will require all of our allies and partners to do more – and there’s no time to lose. For industries like semiconductors and clean energy, we’re nowhere near the global saturation point of investments needed, public or private. “

The ultimate goal is a “strong, resilient, and leading-edge techno-industrial base that the United States and its like-minded partners, established and emerging economies alike, can invest in and rely upon together.”

Mr. Sullivan reiterated that US industrial policy is not an attempt to decouple economically from China. “In fact, the United States continues to have a very substantial trade and investment relationship with China. Bilateral trade between the United States and China set a new record last year.”

Washington is not looking for confrontation but to “manage competition responsibly and seeking to work together with China where we can,” he continued.