The Shift from Globalization to Domestic-First Policies in the United States: A Comprehensive Analysis

This report examines the evolution of US economic policy with a focus on a move from globalization toward economic nationalism and domestic-first priorities. It synthesizes research on historical turning points, legislative reforms, investment and trade dynamics, innovation trends, sector-specific impacts, supply chain restructuring, and international comparisons. Our analysis draws exclusively from recent studies and policy documents, incorporating quantitative data, financials, and embedded citations.

1. Historical Evolution and Key Turning Points

1.1. From Global Order to National Priorities

• Post-World War II Developments:

  • Establishment of Bretton Woods institutions laid the foundation for a liberal, global economic order (see Taylor & Francis).

  • The international system promoted free trade, deregulation, and multinational enterprises.

• Late 20th Century Shifts:

  • Rising discontent amid globalization led to early signs of economic nationalism as domestic challenges began to surface.

  • Historical cycles of intervention followed by retrenchment set the stage for future policy shifts.

• 2016-2025 – America First:

  • The election of President Trump introduced a pronounced America First agenda, characterized by tariffs, renegotiated trade agreements, and protective measures (Federal Register; Stratfor).

1.2. Timeline of Key Events

2. Legislative and Regulatory Shifts

2.1. Historical Domestic-First Reforms

• New Deal Era (1933-1934):

  • Reforms such as the Federal Emergency Relief Administration (FERA), Public Works Administration (PWA), and Agricultural Adjustment Act (AAA) redirected policy focus toward domestic stability (Britannica, Miller Center).

2.2. Contemporary America First Initiatives (2024-2025)

• Executive Order 14105 and Regulation 90398 (November 15, 2024):

  • These measures emphasize controlling outbound investments and addressing national security risks, reflecting a narrowed focus on domestic production (White House).

• Fiscal Reforms and Tax Policies:

  • Proposals include adjustments to tax treaties and incentives for domestic investments, as seen in recent policies under the America First Investment Policy (White House).

3. Impact on Domestic Investments

3.1. Investment Flow Comparisons

Research reveals a marked reorientation of investment flows following the policy shift:

• Pre-Shift: Investments were split between domestic and foreign channels, bolstered by global market integration.

• Post-Shift: Domestic policies such as tax reforms incentivized local investments, while FDI faced increased scrutiny (NBER).

3.2. Key Factors

• Domestic Tax Adjustments: Enhanced fiscal incentives directly spurred capital toward domestic industries.

• Complementarities in Capital Flows: Even as domestic investments increased, multinational firms adapted to new foreign subsidy policies.

• Overall Shift in Narrative: A move toward job creation and national industrial expansion redirected capital flows.

4. Impact on Trade Dynamics

4.1. Tariff Regimes and Trade Agreements

• Tariffs: Steep tariffs on imports such as steel, aluminum, and Chinese goods have been applied to protect domestic sectors (Reuters).

• Trade Agreements: Reassessments of agreements like USMCA and the Phase One Trade Agreement with China aim to reorient trade in favor of US interests (Mayer Brown).

4.2. Trade Balances and Import/Export Trends

• Trade Balance Adjustments: Efforts to reduce persistent deficits through policy reviews and reciprocal tariffs (Federal Register).

• Import/Export Trends: Tariff adjustments and domestic content reviews have impacted the structure of trade flows, favoring local production (Department of Commerce, 2025).

4.3. Summary Table – Trade Dynamics

5. Impact on Innovation and R&D

5.1. Shifts in R&D Funding

• Government vs. Private Funding:

  • Pre-nationalism, private R&D investments outpaced government expenditures by a ratio of approximately 3:1 (NSB 20246 Report).

  • Post-shift, policy uncertainty and a focus on domestic priorities raise concerns about potential underinvestment in long-term basic research.

5.2. Innovation Ecosystem Adjustments

• Technology Clusters and Startup Ecosystems:

  • Increased emphasis on domestic clusters in sectors like AI, semiconductors, and clean energy (CSIS).

  • Startup incubators and local innovation hubs have been bolstered through reoriented federal programs (Conference Board).

5.3. Financial Snapshot – R&D Expenditures

6. Sector-Specific Impacts

6.1. Beneficiary Sectors

Domestic-first policies have notably benefited sectors such as:

• Clean Energy and Renewables: Supported by ITC, PTC, and bonuses for domestic content (Tax Policy Center).

• Nuclear Energy: Expanded tax credits and production incentives.

• Electric Vehicles and Battery Storage: Tax credits of up to $7,500 spur domestic manufacturing.

6.2. Adaptations in High-Tech, Manufacturing, and Agriculture

• High-Tech: Reinforced R&D investments, increased private engagement, and targeted government support have allowed firms to innovate in semiconductors, AI, and robotics (Slideshare - White House).

• Manufacturing: Deployment of advanced manufacturing and re-shoring initiatives under programs like Manufacturing USA has modernized production and increased automation (Manufacturing USA).

• Agriculture: Domestic subsidies (e.g., direct farm payments of ~$10.2 billion in 2023 from USDA ERS) and protectionist measures (e.g., sugar programs) have supported local production, while tariffs and trade tensions have shifted export dynamics (USDA ERS).

6.3. Summary Table – Sectoral Innovations

7. Supply Chain Restructuring

7.1. Re-Shoring and Diversification

• Re-Shoring: Domestically focused policies and tariffs have spurred companies to return production to the US, supported by initiatives under the CHIPS and Science Act (nearly US$799.2 billion in private fixed investments in 2023) (Deloitte).

• Diversification: Firms are adopting dual supply chain models that combine nearshoring and friend-shoring strategies to mitigate risk (SupplyChainBrain).

7.2. Impact on Trade Competitiveness

Restructured supply chains have improved domestic resilience; however, they also introduce cost pressures and inflationary risks (S&P Global).

8. Comparative International Analysis

8.1. Trends in the US vs. Other Economies

• United States: Aggressive unilateral policies (e.g., tariffs up to 60% on certain imports) dominate the nationalist agenda (Reuters).

• European Union: More cautious measures with balanced fiscal reforms and negotiation approaches (Lazard).

• Japan & Emerging Markets: Sustained focus on domestic consumption and gradual rate adjustments while reinforcing regional trade ties (Mellon; BCG).

8.2. Lessons Learned and Best Practices

• Strategic Balance: The US approach can incorporate reciprocal tariff measures and harmonized trade policies as practiced by EU and Japan (ITIF).

• Innovation Partnerships: Bilateral innovation partnerships and data pooling (e.g., ITAR Free Zones) can yield significant spillovers (CNAS).

9. Broader Effects on Service Industries and the Economic Ecosystem

9.1. Service Industry Impacts

• Operational Costs and Talent: Higher tariffs and stricter immigration have increased costs and threatened the flow of international talent, especially in tech-enabled services (CSIS; NatLawReview).

9.2. Ecosystem Implications

• Policy Uncertainty: Rapid policy changes and aggressive trade measures have created uncertainty, impacting investment decisions and slowing innovative activity in global service sectors (Federal Register).

• Domestic Focus: A shift toward regional and domestic sourcing bolsters local industries but may reduce external collaborations essential for long-term innovation.

10. Longitudinal Economic Trends

10.1. Investment and FDI Trends

10.2. Trade Balances

• Pre-Shift: Trade deficits grew alongside increasing global integration.

• Post-Shift: Despite protective measures, deficits persist, influenced by factors such as domestic savings behavior (NBER; PIIE).

10.3. R&D Expenditures

11. Conclusion

The transition from a globalist paradigm to a domestic-first approach in the United States reflects a comprehensive realignment of economic, trade, and innovation policies. This shift—signaled by aggressive trade measures, targeted fiscal and monetary incentives, and a restructuring of R&D investments—has profound implications for domestic investments, trade balances, innovation ecosystems, and sector-specific dynamics. While increased protectionism has spurred re-shoring and bolstered local industries, it has also introduced cost pressures, policy uncertainty, and challenges in maintaining long-term technological leadership. International comparisons and best practices underscore the importance of strategic balance and reciprocal policies to safeguard both national interests and global competitiveness. As the US navigates this new economic terrain, maintaining a dynamic, innovation-friendly ecosystem will be critical to sustaining its competitive edge in an increasingly complex global landscape.

*This report integrates detailed research findings from multiple sources, including Federal Register, Taylor & Francis, Reuters, CSIS, and others, to present a comprehensive overview of economic nationalism's multifaceted impacts on the US economy.

Detailed Version

The Evolution from Globalization to Economic Nationalism in the US

Key Historical Turning Points

• In the post-World War II period, the United States was instrumental in establishing a global economic order through initiatives such as the Bretton Woods Agreements. These institutions laid the foundation for the neoliberal orthodoxy of globalization. Over time, especially by the late 20th century, the dominant paradigm in the U.S. shifted toward free trade, deregulation, and the promotion of multinational enterprises Taylor & Francis eBooks.

• The late 20th century, while marked by strong support for global market integration, also witnessed the seeds of a counter-reaction. The balancing act between maintaining global hegemony and upholding domestic socio-economic policies increasingly underscored inherent contradictions, as pointed out in analyses that describe recurring cycles of American interventionism followed by retrenchment driven by nationalist sentiments.

Political Shifts

• The ascendance of political figures and governments that advocated for America First policies marked a distinct turning point. The election of President Trump, for instance, signaled a move toward economic nationalism, emphasizing domestic production, re-industrialization, and trade protectionism. This shift reframed U.S. priorities from enforcing a global order to recalibrating domestic prosperity and industrial resiliency. Detailed policy changes are set out in the 2025 America First Trade Policy memorandum, which instructs federal agencies to reassess trade and investment strategies fundamentally Federal Register.

• Scholars like Neil Smith and Jeffry Frieden have noted that alongside each period of globalization, a strong current of nationalism has emerged, contesting the liberal, globalist vision of U.S. economic policy. This perspective views economic nationalism not simply as an aberration but as a recurring force that periodically reshapes U.S. policy frameworks Taylor & Francis eBooks; Frieden, 2018.

Major Trade Events

• In the latter part of the 20th century and early 21st century, the U.S. participated actively in shaping free trade agreements and promoting global integration, yet these moves were later met with significant backlash.

• Trade protectionism became a central element of U.S. policy during the Trump era, with tariffs and revised bilateral and multilateral agreements aimed at reducing reliance on imported goods and stimulating domestic industries. This period saw major trade events including the imposition of tariffs and the strategic re-assessment of supply chains that prioritized national over international interests Decade Forecast: 2015-2025.

• The release of the America First Trade Policy details a series of mandated reviews across the Department of Commerce, the Treasury, and the United States Trade Representative, which underline the systematic shift to a domestic-first policy agenda. This represents a move away from longstanding commitments to the liberal international order, towards reasserting U.S. economic sovereignty in global markets Federal Register.

Summary Timeline

Wikipedia style citations:

• America First Trade Policy, Federal Register [https://www.federalregister.gov/documents/2025/01/30/2025-02032/america-first-trade-policy]

• The Endgame of Globalization, Taylor & Francis eBooks [https://www.taylorfrancis.com/books/mono/10.4324/9780203997925/endgame-globalization-neil-smith]

• Decade Forecast: 2015-2025, Stratfor [https://worldview.stratfor.com/article/decade-forecast-2015-2025]

• Frieden, Future of Globalization [https://scholar.harvard.edu/files/jfrieden/files/frieden_future_feb2018.pdf]

This analysis synthesizes insights drawn from multiple sources within the research material, elucidating how historical developments, political transitions, and pivotal trade events have collectively driven the U.S. evolution from a globalist stance toward a more domestically focused economic nationalism.

Specific Legislative and Regulatory Changes Signaling the Shift to Domestic-First Policies in the US

New Deal Era Reforms (1933–1934)

The New Deal represents one of the earliest and most profound shifts toward a domestic-first economic policy. Under President Franklin D. Roosevelt, a series of legislative and regulatory initiatives were implemented to stimulate domestic economic activity and protect American citizens from the ravages of the Great Depression. Significant components include:

• Emergency Banking and Relief Programs: Early in 1933, Congress and the administration quickly passed reforms that rebooted the banking system and provided direct cash relief. Programs like the Federal Emergency Relief Administration (FERA) provided immediate assistance to states for helping unemployed Americans, demonstrating a shift toward investing in domestic stability Britannica.

• Public Works and Infrastructure: The Public Works Administration (PWA), with a budget exceeding $3 billion, oversaw construction projects ranging from roads to iconic bridges (e.g., San Francisco’s Golden Gate Bridge), aimed at creating jobs and stimulating domestic demand Miller Center.

• Agricultural Support and Regulation: The Agricultural Adjustment Act (AAA), passed in May 1933, sought to stabilize farm incomes by incentivizing reduced production, marking a focused legislative effort to support domestic agriculture Britannica.

• Industry and Labor Regulation: The National Industrial Recovery Act (NIRA) and its centerpiece, the National Recovery Administration (NRA), attempted to forge a business-government partnership by establishing fair codes of competition, while also guaranteeing labor the right to organize and bargain collectively. Although some aspects were later critiqued and deemed ineffective, these regulations underscored a shift toward leveraging domestic policies to control economic conditions Miller Center.

Recent America First Initiatives (2024–2025)

A modern manifestation of domestic-first policy is reflected in the recent regulatory changes highlighted by the America First Trade Policy. Key elements include:

• Executive Order 14105 and Associated Regulations: Implemented via Regulation 90398 on November 15, 2024, these measures are designed to address national security challenges by controlling outbound investments and ensuring that foreign financial contributions do not distort US federal procurement programs. The regulatory approach emphasizes protecting domestic industries from foreign influence and fostering a self-reliant economic environment White House.

• Targeted Assessments and Reports: The policy mandates coordinated reviews by the Secretary of Commerce, the Secretary of the Treasury, the United States Trade Representative, and the Director of the Office of Management and Budget, with report deadlines set in April 2025. These assessments focus on identifying and remedying distortions caused by foreign government financial contributions, and addressing security threats such as unlawful migration and illicit drug flows. This structured, domestic-first review process is a clear legislative and regulatory signal of the current administration’s priorities.

Complementary Fiscal and Trade Policies

While the New Deal and recent America First policies mark the most distinct legislative actions, there have been other periods where domestic-first measures have been emphasized:

• Clinton Administration Fiscal Discipline (1993–1997): Key domestic reforms were implemented through the 1993 Deficit Reduction Plan and the Balanced Budget Agreement of 1997. These measures, although primarily aimed at fiscal balance and reducing debt, contributed indirectly to a domestic-first agenda by improving economic stability and prioritizing domestic investments in education, technology, and workforce development Clinton White House Archives.

Summary Table of Key Legislative and Regulatory Changes

This table and the detailed discussion highlight the evolution of domestic-first policies through legislative and regulatory changes implemented at critical junctures in US economic history. Each set of reforms reflects a deliberate policy choice to prioritize domestic needs—whether by countering a severe economic depression or by protecting domestic interests in a globalized market environment.

How Political Speeches, Public Sentiment, and Media Framing Shaped the Narrative

Political Speeches and Rhetoric

Political speeches have been a critical instrument in transforming America’s economic outlook from one defined by broad global integration to a focus on domestic interests. Speeches by figures such as President Trump, who frequently used slogans like “America First,” emphasized the importance of safeguarding domestic manufacturing and jobs. By reinterpreting trade policy debates, these speeches shifted attention from the benefits of free trade to narratives of lost manufacturing jobs and weakened national sovereignty. Analysts like Peter Evans argue that such rhetoric isn’t simply a return to protectionism but a deliberate narrative shift designed to distract from broader economic policies, while reinforcing a sense of national decline and the need for urgent corrective action source. Historical examples also come into play, as political leaders hark back to earlier periods – such as Henry Clay’s “American System” – to legitimize domestic-first policies that protect local industries and assert national economic autonomy source.

Public Sentiment and Opinion

Surveys and studies reflect a public sentiment that has been marshaled to support the narrative of economic nationalism. While many Americans report that they have personally benefited from globalization, a significant portion also believes that the nation as a whole has suffered due to job losses and deindustrialization. For example, research conducted by American Compass showed that a substantial majority of respondents felt that globalization – or in some cases, the specific economic engagement with China – harmed the U.S. overall, despite a personal benefit margin in some demographic groups source. This cognitive dissonance has allowed political figures to emphasize restoration of domestic industries, thereby reinforcing a collective memory of economic decline and fostering a political demand for policies that prioritize domestic interests over global integration.

Media Framing

Media outlets and think tanks have played an influential role in framing the debate on economic nationalism. Articles and commentary from a variety of sources have linked the decline in manufacturing and competitive global trade with the need to adopt protectionist, domestic-first policies. Publications like The Economist and analyses by scholars such as Adam Tooze have framed the narrative as a resurgence of nationalist sentiment and domestic economic self-reliance in response to globalization’s perceived failures source.

Media narratives have also capitalized on high-profile political speeches to underscore the shift – using vivid language and historical parallels to contest the neoliberal consensus. This framing not only reinforces popular feelings of economic insecurity but also legitimizes political actions such as trade wars and the renegotiation of global trade agreements. These reframed discourses assert that global trade has often placed U.S. workers at a disadvantage and that a return to domestic-focused policies is necessary to reclaim national prosperity and innovation source.

Integrated Narrative Construction

Together, political speeches, public sentiment, and media framing have converged to construct a powerful narrative of economic nationalism. Politicians have harnessed public discontent, as evidenced by polls showing a widespread belief that despite individual gains, the nation has collectively lost out to global competition. At the same time, media outlets have amplified this narrative through analytical pieces that draw historical comparisons and highlight policy failures of globalization. The combined effect has been to validate a shift towards domestic-first policies, where investment is redirected, trade agreements are reexamined, and innovation systems are repositioned within a framework that prioritizes national sovereignty over open global markets.

This multidisciplinary construction—from official speeches to public opinion surveys and media analysis—illustrates how a carefully curated narrative has turned globalization’s perceived shortcomings into a rallying cry for economic nationalism, reshaping policy and investment landscapes in the United States.

How Domestic Investment Flows Compare Pre- and Post-Policy Shift and the Influencing Factors

Comparative Trends in Investment Flows

Research evidence from recent working papers and publications indicates a marked change in domestic investment flows following a policy shift toward economic nationalism. Prior to this shift, investment was characterized by a globally integrated focus, with firms balancing domestic and foreign capital in a context of open markets. Post-shift, domestic policies such as tax reforms and protective measures have reoriented the flow of capital toward domestic investments. In particular, analyses of firm-level data suggest that domestic-only firms responded significantly to domestic tax incentives—demonstrated by regressions in which investment changes aligned with the effective domestic tax term—while the shift in policy also created complementarities between domestic and foreign capital, further influencing how multinational firms adjusted their investment patterns source.

Primary Factors Influencing Investment Trends

1. Domestic Tax Policy Adjustments

Domestic-only firms exhibit elasticities to changes in domestic tax terms (denoted as τ and its counterpart in models) that are in line with earlier literature. These adjustments suggest that the new regime of domestic-first policies has provided a direct fiscal incentive for redirecting capital towards domestic operations. The analysis shows that these coefficients tend to have opposite signs and equal magnitude, reflecting the inverse relationship with the parameter (1 − α) in the production function source.

2. Complementarity between Domestic and Foreign Capital

For multinational firms, domestic investment responses are not isolated from foreign factors. The effective foreign subsidy (Γ̄) also positively impacts domestic investment, suggesting that even as governments tailor policies to promote domestic capital, domestic and foreign capital remain complementary. This means that policies like the GILTI tax under the post-shift regime create conditions where increases in foreign capital indirectly stimulate domestic investment source.

3. Broader Shift Toward Economic Nationalism

In the broader context, the move toward economic nationalism has also been motivated by changes in trade, industrial, and competition policies. Publications from the Peterson Institute for International Economics highlight that economic nationalism has led to a rebalancing of priorities, with increased attention to job creation and national industrial expansion over global integration. This realignment creates an environment where domestic capital is more attractive relative to foreign options, contributing to the observed shift in investment flows source.

Summary of Findings

• Pre-policy change: A balanced, globally integrated investment environment characterized by relatively stable domestic investment flows.

• Post-policy change: A significant reorientation of investment flows toward domestic markets, spurred primarily by government-imposed fiscal changes and an ideological shift emphasizing national economic interests.

• Key drivers include adjustments in domestic tax policy, complementary behavior between domestic and foreign capital, and the overall shift in policy narrative favoring domestic-first approaches.

These factors collectively illustrate how the adoption of economic nationalism has altered the dynamics of domestic investment flows, driving a move from a predominantly globalized investment strategy to one that increasingly prioritizes national objectives.

How Economic Nationalism Has Impacted FDI in the US

Economic nationalism in the US has led to a tightening of regulatory controls over foreign direct investment (FDI) and a reorientation of capital flows toward domestic and regionally focused investments. Several government initiatives and policy adjustments have sought to reassess and, in some cases, restrict cross-border capital movements to protect critical sectors and promote domestic growth.

Increased Scrutiny and Strategic Review

Documents such as the “America First Trade Policy” memorandum 1 highlight an administrative emphasis on reviewing and potentially modifying programs such as the Outbound Investment Security Program. This reassessment is designed to shield core industries from undue foreign influence, particularly when government financial contributions or subsidies by foreign investors might distort competition. Such measures have not only affected the volume and composition of FDI but have also led to more rigorous vetting of incoming investments in strategic areas, reflecting a prioritization of national security interests over unfettered capital inflows.

Domestic Investment Surge

In parallel with the restrictive approach on FDI, there has been significant encouragement of domestic investment. The U.S. Department of Commerce Impact Report 2 underscores the effect of the CHIPS Program in catalyzing nearly $450 billion in private investments in semiconductor and electronics companies. This redirection of capital demonstrates a movement away from reliance on foreign capital in critical sectors, further illustrating the government’s commitment to reshoring and fostering domestic competitiveness.

Rebalancing of Capital Flows

Shift Toward Regional and Domestic Reinvestment

In an environment increasingly defined by economic nationalism, capital flows are being rebalanced. Rather than pursuing broad-based global investment, both domestic and foreign capital is now more focused on aligning with U.S. strategic interests. These changes have resulted in:

• A Reduced Dependence on Foreign Capital: With higher scrutiny on FDI and a preference for protecting domestic industries, investments that historically flowed into sensitive sectors are now more likely to be sourced domestically.

• Enhanced Regional Integration: Trade policies and tariff adjustments 3 have not only restricted foreign inflows but also promoted rebalancing by directing capital among North American partners, as part of a broader strategy to strengthen regional supply chains.

Financial Data and Indicators

A comparative snapshot can be observed in the following table where domestic investment, particularly in high-strategic sectors like semiconductor manufacturing, has surged partly at the expense of traditional FDI flows:

Policy-Driven Reallocation

The spectrum of policies, including potential tariff adjustments and executive orders that re-emphasize national priorities 1 3, signals a deliberate rebalancing of capital flows. Outbound investments from the US are also under review, further balancing the interplay between external investments and domestic capital deployment.

Overall, the shift toward economic nationalism has led to more stringent evaluation and, when necessary, curtailment of FDI in sectors critical to national security, while fostering a robust domestic investment environment and a realigned pattern of capital flows more centered around domestic and regional opportunities.

Fiscal and Monetary Incentive Policies to Boost Domestic Investment in the US

Fiscal Incentives

Clean Energy and Advanced Manufacturing Credits

One of the major fiscal initiatives has been the implementation of domestic content bonuses and related tax credits as part of the Inflation Reduction Act (IRA). According to guidance from the U.S. Department of the Treasury, this initiative provides a domestic content bonus for Clean Electricity Production and Investment Tax Credits. Key features include:

• A bonus that boosts American manufacturing by requiring that key components for clean energy projects—from solar cells and solar wafers to parts used in battery storage and wind energy—be domestically produced.

• Complementary credits such as the advanced manufacturing production credit (45X), the qualifying advanced energy project credit (48C), and the CHIPS advanced manufacturing investment credit (48D) designed to further incentivize domestic production and investment in clean energy sectors. whitehouse.gov

Tax Reforms and Investment Proposals

Recent policy documents, including the Presidential Memorandum known as the America First Investment Policy, detail how tax incentives and other fiscal measures are used to discourage outsourcing and promote domestic investment. These include:

• Proposals to adjust or suspend tax treaties (such as with China) in order to reduce capital flows that would otherwise support foreign production.

• Measures that encourage domestic investment by making it less attractive for U.S. investors to invest in sectors linked to foreign adversaries. whitehouse.gov

Reported Effectiveness

Fiscal policies under these initiatives have achieved significant scale. For example, in the clean energy sector alone companies have announced more than $196 billion in investments in clean power and $92 billion in clean energy manufacturing. These figures indicate a strong response from the private sector in line with policy goals of job creation, increased domestic production, and enhanced energy security.

Monetary Incentives

Interest Rate Reductions and Liquidity Measures

Monetary policy has also played a key role in stimulating domestic investment. Reports from the Congressional Budget Office (CBO) and the Federal Reserve indicate the following measures:

• The Federal Reserve has progressively lowered the federal funds rate through targeted rate cuts, with projections pointing to rates at around 3.7% by the fourth quarter of 2025. This reduction aims to lower borrowing costs, which in turn stimulates consumption and encourages investment in both nonresidential and residential structures. cbo.gov

• The Fed’s activities, including open market operations and quantitative easing programs, have increased liquidity in the economy. This easing is reflected in the residential investment growth figures—where residential investment is projected to grow from 2.5% to an average of 6.4% in upcoming years—with falling interest rates bolstering demand for new homes. cbo.gov

Policy Communication and Framework Reviews

The Federal Reserve also engages in regular reviews of its monetary policy framework, ensuring that strategies remain consistent with its dual mandate of maximum employment and price stability. These reviews and adjustments provide clarity and forward guidance to financial markets, which helps stabilize expectations and further encourages investment decisions.

Summary of Combined Impact

The combined fiscal and monetary approaches have contributed directly to boosting domestic investment. In a fiscal context, targeted tax credits and domestic content incentives have led to substantial capital inflows into clean energy and advanced manufacturing sectors, while broader tax reforms are designed to reorient investment flows domestically. On the monetary side, lower interest rates and active liquidity management by the Federal Reserve have reduced borrowing costs and stimulated both business and residential investments.

Financial Data Snapshot

Below is a table summarizing key financial data points drawn from the provided research:

Effectiveness in Achieving Economic Goals

Available evidence indicates that these policies have been broadly effective in meeting their aims:

• The scale of reported investments in clean energy and domestic manufacturing demonstrates that fiscal incentives are successfully redirecting capital into domestic sectors.

• Monetary policy adjustments, through lower interest rates and improved liquidity, have helped stimulate both labor market conditions and the housing market, underpinning a modest but stable growth in GDP.

• The integration of fiscal and monetary measures not only supports economic growth but also contributes to broader policy goals around national security and economic self-reliance, hallmarks of the shifting focus from globalization to a domestic-first economic policy.

Overall, while the long-term impacts continue to be monitored through annual reports and adjustments, recent data and projections underscore a positive trend in domestic investment, innovation, and trade reorientation.

Citations

• U.S. Department of the Treasury Press Release: Treasury • Presidential Memorandum on America First Investment Policy: White House • Congressional Budget Office Report: CBO

Which Specific Sectors Have Benefited the Most from Domestic-First Policies in the US, and How Have Government Subsidies, Tax Incentives, or Other Supports Contributed to Increased Investments in These Sectors?

Clean Energy and Renewable Power

Domestic-first policies, such as those outlined in the Inflation Reduction Act (IRA), have provided a significant boost to the clean energy sector. Tax incentives and production credits have been pivotal in increasing investments in renewable power projects. Specifically:

• Solar and Wind Energy: Projects in these areas benefit from both the investment tax credit (ITC) and the production tax credit (PTC), which reward projects that meet specific standards. For example, the ITC originally stood at 30% but now starts at a 6% base, with potential increases tied to labor standards, domestic content, and location within an energy community Tax Policy Center.

• Biomass, Geothermal, and Hydro: These renewable technologies also benefit from the PTC, though solar and wind projects have emerged as the dominant beneficiaries.

Nuclear Energy

Once characterized by modest subsidies, the nuclear energy sector has seen enhanced support through the IRA. With an expansion of tax credits for nuclear power, particularly through a production tax credit for zero-emission nuclear production, the sector is emerging as a more attractive investment option. This support positions nuclear energy as a lower-carbon alternative amid global decarbonization initiatives Tax Policy Center.

Electric Vehicles and Battery Storage

The automotive and energy storage sectors are beneficiaries of significant federal support:

• Electric Vehicles (EVs): Tax credits for plug-in electric light passenger vehicles and trucks can reach up to $7,500. These incentives are tied to specific criteria, including domestic content and material sourcing, encouraging manufacturers to invest in local production and supply-chain development Tax Policy Center.

• Battery Storage and Charging Infrastructure: Government programs have also targeted incentives for battery development and energy storage, often as a part of wider clean energy initiatives U.S. Department of Energy.

Energy Efficiency and Advanced Manufacturing

Investment in energy efficiency improvements in both commercial and residential sectors has seen robust federal support through tax credits and subsidies:

• Residential and Commercial Energy Conservation: Homeowners benefit from technologies like solar electric installations, water heating systems, and battery storage, supported by credits such as the Section 25D residential energy-efficient property tax credit. Commercial buildings have also received incentives for investments that improve lighting, heating, cooling, and overall building envelope efficiency Tax Policy Center.

• Advanced Energy Manufacturing: Facilities investing in advanced energy property that generates clean power or improves efficiency are eligible for manufacturing tax credits. These incentives are part of a broader strategy to bolster domestic production capabilities and reduce reliance on foreign supply chains Deloitte US.

Summary Table of Key Sectors and Incentives

Citations

• Deloitte Global Survey of Investment and Innovation Incentives: Deloitte

• DSIRE - Database of State Incentives for Renewables & Efficiency: DSIRE

• Inflation Reduction Act Overview: Treasury Inflation Reduction Act

• Tax Incentives Encouraging Alternatives to Fossil Fuels: Tax Policy Center

• Battery Policies and Incentives: U.S. Department of Energy

This analysis synthesizes available public data indicating that domestic-first policies in the US have largely benefited the clean energy, nuclear, electric vehicle, and energy efficiency sectors through targeted government supports.

How US Trade Balances, Import/Export Trends, and Partner Diversity Have Been Influenced by Domestic-First Policies

Trade Balances

Domestic-first policies, particularly under the “America First Trade Policy” memorandum, explicitly focus on addressing the large and persistent US trade deficit. Multiple agency reviews were mandated to scrutinize non-reciprocal trade practices and identify imbalances, with potential remedies such as a global supplemental tariff. This approach is aimed at reducing the deficit, protecting the domestic industrial base, and countering unfair practices from trading partners (see White House Articles and Federal Register). Several directives, such as reviewing the Section 301 investigation and assessing currency manipulation by foreign nations, underscore a drive to modify the trade balance via targeted tariffs and policy reforms.

Import/Export Trends

The domestic-first paradigm has generated a comprehensive review of current import/export practices. The memorandum calls attention to unfair trade practices—including issues like counterfeit imports and forced intellectual property transfers—and mandates evaluations of existing antidumping and countervailing duty laws. Consequently, trends were influenced by:

• Tariff Adjustments: Proposals for new tariffs, especially on products from nations such as China, Canada, and Mexico, are designed to curb excessive imports and stimulate domestic production. For instance, while existing tariffs on steel and aluminum remain as a protection measure, new measures targeting sectors with large trade deficits are under review (Thompson Hine).

• Reassessment of Trade Agreements: The USTR is tasked with reviewing agreements such as the Phase One Trade Agreement with China and the USMCA slated for a joint review in 2026. These steps are intended to ensure that export markets are expanded for American products and that imports do not unduly undermine domestic industries.

• Shift in Domestic Content: Industry-specific studies, such as the “Purchased in America 2023” report, highlight disparities in domestic versus imported content. For example, while sectors like printing or food show high domestic content (above 78%), industries including computer electronics have a larger share of imports (e.g., domestic content as low as 29 percent), reflecting ongoing challenges and policy-driven aims to rebalance the production mix (Department of Commerce, 2025).

Partner Diversity

Domestic-first policies under economic nationalism are closely tied to reassessing trading partner diversity. The Memorandum instructs the USTR to:

• Review existing trade agreements and sectoral trade treaties to ensure they yield reciprocal and mutually advantageous concessions.

• Identify opportunities for new bilateral or sector-specific agreements aimed at improved market access for American industries.

These revisions and the ambitious review of trade practices potentially limit reliance on partners that engage in unfair competitive behaviors (e.g., currency manipulation or improper subsidies). The emphasis on friend-shoring and selective partnerships signifies an intent to diversify away from less reciprocal or politically-risky markets, thereby reshaping the landscape of partner diversity. As the White House prepares comprehensive reports on the impact of these policies, the focus distinctly shifts from broad globalization to targeted, mutually beneficial ties with partners deemed most advantageous for domestic economic security (CV International).

Summary Table of Key Influences

Citations

1. Federal Register (2025). America First Trade Policy. https://www.federalregister.gov/documents/2025/01/30/2025-02032/america-first-trade-policy

2. White House Articles (2025). Reciprocal Trade and Tariffs. https://www.whitehouse.gov/articles/2025/02/reciprocal-trade-and-tariffs/

3. Thompson Hine. President Trump Announces “America First Trade Policy”. https://www.thompsonhinesmartrade.com/2025/01/president-trump-announces-america-first-trade-policy/

4. Department of Commerce (2025). Purchased in America 2023. https://www.commerce.gov/sites/default/files/2025-01/Purchased-in-America-2023.pdf

5. CV International. America First Trade Policy Memorandum Released by the White House. https://cvinternational.com/america-first-trade-policy-memorandum-released-by-the-white-house/

Adjustments to US Tariff Regimes, Trade Agreements, and Protective Measures

Tariff Regimes

The shift towards economic nationalism in the US has led to significant changes in tariff regimes. Under the America First Trade Policy, the US has implemented tariffs on various imports to protect domestic industries and address trade imbalances. For instance, tariffs have been imposed on steel and aluminum imports, which are critical to the automotive and construction industries. These measures are intended to bolster national security and reduce dependency on foreign imports [source].

Additionally, the US has threatened to impose tariffs on a wide range of products from countries like China, Mexico, and Canada. This includes a 10% tariff on Chinese imports and potential tariffs on Mexican and Canadian goods [source]. These tariffs are part of a broader strategy to correct trade imbalances and encourage reciprocal trade practices.

Trade Agreements

The US has also reviewed and adjusted its trade agreements to align with economic nationalism. The United States-Mexico-Canada Agreement (USMCA) has been a focal point, with ongoing assessments to ensure it benefits American workers and industries. The US has also scrutinized its trade relationship with China, particularly the Phase One Trade Agreement, to ensure compliance and address issues related to technology transfer and intellectual property [source].

Protective Measures

Protective measures have been expanded to include stricter enforcement of trade laws and the establishment of an External Revenue Service to collect tariffs and duties. The US has also focused on addressing unfair trade practices and currency manipulation by major trading partners [source].

Impact on Trade Dynamics

These adjustments have led to increased tensions with trading partners, resulting in retaliatory tariffs and strained trade relationships. The imposition of tariffs has raised the cost of imports, affecting consumer prices and business operations. For example, higher tariffs on imported materials have increased production costs for US manufacturers, potentially leading to higher prices for consumers [source].

Moreover, the focus on domestic industries has prompted shifts in global supply chains, as companies seek to mitigate the impact of tariffs by relocating production or sourcing materials from alternative markets. This has led to a reevaluation of trade strategies and increased competition among domestic producers [source].

The Extent of Supply Chain Restructuring Driven by US Economic Nationalism

Policy Drivers and Industrial Incentives

US economic nationalism has been a major catalyst for the restructuring of supply chains. A heightened focus on domestic-first policies has led to a series of legislative and regulatory actions – including tariffs, trade agreement revisions, and targeted re-shoring incentives – that are designed to reduce dependence on traditional global supply bases, particularly originating from China. Key drivers include:

• Tariff Regimes and Trade Policy Reviews: According to the BCG report, changes such as a 60% tariff on Chinese goods under proposed scenarios could force companies to explore alternative suppliers, while new tariffs on other regions under the USMCA may drive regional supply chain reorganization 1.

• Government Legislation and Incentives: Recent US legislation, notably the CHIPS and Science Act, the Inflation Reduction Act, and other initiatives, have provided cash incentives and investment in domestic production. These measures are not only intended to bolster domestic manufacturing but also aim to promote reshoring and nearshoring, in part by reconfiguring the labor cost equation and reducing reliance on volatile international shipping 2.

• Bilateral and Regional Agreements: The reinforcement of USMCA and other bilateral trade deals have encouraged companies to relocate supply chains regionally. Factories in Mexico and Canada are benefitting from incentives meant to facilitate a shift away from reliance on distant manufacturing hubs 1 and 2.

Restructuring Efforts: Re-shoring, Nearshoring, and Diversification

The response to economic nationalism has been multifaceted. Companies are redesigning their supply chain strategies to incorporate both re-shoring and diversification approaches:

• Re-shoring Initiatives: There is clear evidence of companies shifting manufacturing back to the US. The emphasis on ‘America First’ policies has led to an environment where domestic manufacturing is being reinvigorated. For example, according to Deloitte’s analysis, government-driven initiatives and improved industrial policies have spurred an increase in private fixed investment in US manufacturing, with spending reaching nearly US$799.2 billion in 2023 2.

• Diversification and Nearshoring: Many companies are devising ‘dual supply chain’ models to mitigate risks associated with heavy reliance on China. As reported by SupplyChainBrain, about 32% of businesses plan to initiate dual supply chains; this involves maintaining links with Chinese suppliers while simultaneously developing production hubs in allied countries such as Thailand, Vietnam, or Mexico 3. In parallel, initiatives such as friendshoring are gaining traction, where supply chains are redirected to countries that share strategic political or economic alliances with the US.

• Regional Supply Chain Strengthening: Free trade agreements, notably the USMCA, are reinforcing the drive toward regionalization. FDI inflow into North America has grown significantly. For instance, FDI directed to North America has increased by 134% since the origination of USMCA, encouraging manufacturers to re-locate and secure lower tariff advantages 2.

Impact on Overall Trade Competitiveness

The restructuring of supply chains under US economic nationalism has a mixed impact on trade competitiveness:

• Enhanced Resilience and Agility: Domestic re-shoring and regionalizing supply chains contribute to greater resilience. Companies are better able to respond to geopolitical shifts and disruptions, which in the long term can increase the competitiveness of US trade by reducing vulnerabilities in critical sectors 1.

• Cost Implications and Inflationary Pressures: While reshoring may strengthen supply chain security and national competitiveness, it may also increase costs. Tariff increases – as seen in scenarios where Chinese imports face up to 60% tariffs – lead to higher import costs. This, as seen in S&P Global’s forecast, could result in increased raw material costs and inflationary pressures on the domestic economy 4.

• Competitive Position in Global Markets: The strategic shift away from traditional globalization has not resulted in a retreat from international trade. Rather, it has encouraged the US and its allies to form resilient trade blocs. For example, the strengthened trade relationship within North America is projected to boost annual US-Mexico trade by $315 billion and US-Canada trade by $147 billion by 2033, positively enhancing trade competitiveness within the region 1.

Key Financial and Statistical Data

Below is a summary table that highlights some key financial indicators and forecasts supporting these supply chain trends:

Synthesis and Overall Findings

US economic nationalism has been a prominent force behind the restructuring of supply chains. Re-shoring, nearshoring, and diversification efforts have been accelerated by policy measures including new tariffs, trade agreement revisions, and domestic incentive programs. These shifts have increased the resilience and responsiveness of supply chains, particularly in industries such as automotive, electronics, and consumer goods. At the same time, while the drive for resiliency and reduced geopolitical risk has bolstered regional trade blocs and improved long-term competitiveness, short-term cost increases and inflationary pressures remain important considerations. Overall, this duality suggests that while US trade competitiveness is being reoriented to favor domestic and regional resilience, the transition carries both benefits and challenges that will shape global trade dynamics in the years to come.

How Has the Balance Between Government and Private R&D Funding Changed with Domestic-First Innovation Policies?

Shift in Funding Dynamics

Recent domestic-first innovation policies have fostered a rebalancing of R&D investments in the United States. Historically, public and private R&D investments were more balanced, but over the past few decades, and particularly under a shift toward economic nationalism, the private sector has come to dominate overall R&D funding. This shift is documented by multiple sources, with data showing that by the 2020s, private R&D investments grew to over three times the level of government-funded R&D, reflecting a trend toward market-driven, shorter-term development initiatives while the government has continued to primarily support basic, long-term research Wikipedia Wikipedia.

Government R&D Funding: Role and Trends

Government funding, although a smaller share of overall R&D, has maintained a crucial role in underpinning high-risk, long-term, and basic research:

• In 2022, government performance accounted for about 8% of total R&D, and it provided roughly 18% of R&D funding. Importantly, the federal government supported 40% of the nation’s basic research, an area less attractive to private financiers due to its long-term horizon and risk profile Wikipedia.

• Targeted policy initiatives such as the CHIPS and Science Act have bolstered government investment in strategically critical sectors (e.g., semiconductors) with dedicated funds for R&D, workforce development, and associated programs. For instance, the CHIPS Act appropriated $52.7 billion to revitalize the semiconductor industry, with approximately $13.7 billion supporting R&D and related activities Wikipedia.

Private R&D Investment: Expansion and Concentration

In contrast, private sector R&D has experienced robust and steady growth:

• By the early 2020s, private R&D has accounted for around 75%–78% of total R&D expenditures, with figures reaching approximately $602 billion in 2021, and much of this funding is channeled into development and market-driven research Wikipedia.

• The private sector’s focus on applied research and development accelerates commercialization of new technologies in industries such as pharmaceuticals, computer hardware, and electronics. However, this focus may come at the expense of long-term, fundamental research which the government typically funds.

Implications for Technological Development

The evolving balance between government and private R&D has several implications for technological development:

1. Risk and Innovation Spectrum: Government R&D continues to support high-risk, breakthrough research critical for disruptive innovations (e.g., the early research that led to the internet). In contrast, private R&D is more conservative, channeling investments into projects with clearer commercial viability. This division risks underinvestment in long-term exploratory research unless government funding is maintained or increased.

2. Sectoral and Regional Concentration: Private sector R&D investments have increasingly favored industries like semiconductors, IT, and pharmaceuticals, potentially leading to geographical and sectoral concentration of technological development. The domestic-first approach also directs government funding to specific regions and strategic sectors, which can improve supply chain resilience, but may leave other areas underinvested Wikipedia.

3. Policy Coordination and Innovation Ecosystem: A robust innovation ecosystem requires a balance between market-driven development (private R&D) and foundational research (government-funded R&D). As domestic-first policies strengthen industrial and defense priorities, there is a pressing need to ensure that long-term basic research is not neglected, as it forms the groundwork upon which transformative technologies are built.

Financial Data Snapshot

Note: These figures highlight that while private investments have seen rapid growth under domestically focused policies, government investments remain a critical driver for basic and high-risk research.

Conclusion

The shift toward domestic-first innovation in the US has amplified the dominant role of private R&D investments, emphasizing market-driven development and short-term, commercially viable projects. However, the government's role in supporting basic research and strategic, long-term projects remains essential for sustaining transformative technological development. Balancing these dynamics is critical to maintain a competitive, resilient, and innovative technological ecosystem.

The Impact on High-Tech, Manufacturing, and Agriculture under a Domestic-First Paradigm

High-Tech Sector Adaptation

• Innovation-Focused Government Support: High-tech companies have leveraged targeted government policies focused on boosting domestic research and development. Initiatives such as the U.S. strategy for innovation stress increased investment in basic research (e.g., semiconductor technology, robotics, and digital communication) with measures such as research tax credits and demonstration funding to close the gap between basic science and commercial application 1.

• Enhanced Private-Sector Engagement: The transformation has been catalyzed by realigning domestic policies to ensure that private companies capture greater returns on their innovations, encouraging reinvestment in local R&D and platform technologies. This not only drives competitive products domestically but also sets the stage for global competitiveness in areas like microprocessors and AI-driven devices.

Manufacturing Sector Transformation

• Public-Private Collaborations and Advanced Manufacturing: Under the domestic-first agenda, the U.S. manufacturing landscape has seen extensive integration of advanced manufacturing technologies through networks like the Manufacturing USA institutes. These institutes bring together industry, academia, and government entities to facilitate technology transfer, scaling-up of innovations, and workforce development 2.

• Supply Chain Resilience and Decarbonization: Reflecting a shift from global supply dependencies, manufacturers are investing in domestic production channels that emphasize clean and sustainable manufacturing. This includes implementing state-of-the-art systems to reduce greenhouse gas emissions, improve energy efficiency and create resilient supply chains that are less vulnerable to international disruptions 3.

• Digital Integration and Innovation: Digital transformation, including connectivity and automation, has been accelerated to improve efficiency and product quality in domestic manufacturing. This integration is seen as key to competing with overseas production while meeting national security and economic objectives.

Agriculture Sector Innovations

• Regulatory Modernization and Technology Adoption: The agriculture domain has embraced a domestic-first approach by modernizing its regulatory framework to accelerate the adoption of breakthrough technologies such as biotechnology, precision agriculture, and climate-smart practices. The Agriculture Innovation Agenda from the USDA exemplifies this effort, aiming to increase production by 40% while reducing environmental impacts 4.

• Enhanced Productivity through Science and Data: Domestic agricultural innovation has been underpinned by investments in research and development that focus on sustainable methods, including soil health monitoring, renewable energy integration, and advanced nutrient management. Programs and initiatives have been implemented to better align public and private research, thus ensuring that farmers have access to the latest technologies tailored to improve yields and reduce resource dependency 5.

• Focus on Local Supply Chains: The shift to a domestic-first economic paradigm has also meant bolstering local supply chains in agriculture. Enhanced cooperation between regional outreach networks and federal agencies has supported the rapid deployment of innovative practices, ensuring that U.S. farmers can meet domestic demand more efficiently and sustainably.

Summary Table of Sector Innovations

This synthesis highlights how, in response to a domestic-first economic paradigm, each sector has adapted by prioritizing localized research, development, and production while focusing on sustainable and resilient practices.

Adjustments in the US Innovation Ecosystem in Response to Domestic-First Policies

Changes in Technology Clusters

Domestic-first policies have steered the emphasis toward building and concentrating strategic technology clusters within the United States. Key aspects include a reinforced focus on emerging sectors such as advanced AI, semiconductor manufacturing, and clean energy innovations. For instance, executive orders and budgetary priorities indicate a restructuring of technology clusters by anchoring investments into frontier AI infrastructure and clean-power initiatives needed to build data centres domestically source: Biden White House Archives, source: CSIS.

Startup Ecosystem Adjustments

The shift to a domestic-first policy framework has also reoriented startup ecosystems. Key adjustments include:

• Emphasis on Local Innovation: Startups are increasingly tapping into domestic R&D investments, reducing reliance on global supply chains. This supports a more secure innovation environment where entrepreneurial talent is nurtured locally.

• Enhanced Funding Models: Policy changes and budgetary reforms, such as those highlighted in the Biden administration’s budget and the FAS innovation initiatives, have helped direct capital toward early-stage companies and innovative projects that are critical to maintaining U.S. technological leadership source: FAS.

• Policy-Driven Ecosystem Support: Domestic financial and regulatory reforms have led to a more transparent and targeted funding landscape for startups, reinforcing a climate that supports homegrown entrepreneurs.

Incubator Program Enhancements

In parallel with shifts in technology clusters and startup strategies, incubator programs have seen significant recalibration:

• Localized Incubation: Incubator initiatives are now increasingly linked with local communities and post-industrial regions. They serve as effective platforms to convert national laboratory research and academic innovation into commercial ventures, thereby fostering local economic growth source: Conference Board.

• Integration with Federal Initiatives: New programs are emerging that connect federal R&D efforts with regional incubators, ensuring that innovation is not only funded but also translated into practical market solutions. This alignment helps mitigate risks associated with dependence on international networks.

• Focus on Strategic Sectors: Incubator programs are being tailored to support industries identified as national priorities—such as AI, clean technology, and biotech—ensuring that startups operating in these areas can access specialized resources and capital.

Summary Table

Citations

• Biden White House Archives, Executive Order on Advancing U.S. Leadership in AI Infrastructure: https://bidenwhitehouse.archives.gov/briefing-room/presidential-actions/2025/01/14/executive-order-on-advancing-united-states-leadership-in-artificial-intelligence-infrastructure/

• CSIS, Strengthening the U.S. Innovation Ecosystem: https://www.csis.org/programs/renewing-american-innovation/strengthening-us-innovation-ecosystem

• FAS, Bold R&D, Innovation, and Competitiveness Policy for 2025: https://fas.org/day-one-project/innovation-and-competitiveness/

• Conference Board, America in Perspective: Policy Priorities for 2025: https://www.conference-board.org/research/solutions-briefs/america-in-perspective-policy-priorities-for-2025

Impact of Economic Nationalism on US Manufacturing and Industrial Base

Domestic Production

Economic nationalism has driven a strong shift toward domestic production by encouraging policies aimed at reducing reliance on global supply chains. Under initiatives such as the “America First Trade Policy” and various agency reviews mandated by President Trump’s administration, US trade policies have been reoriented to favor American workers and industries Wikipedia-style citation: (Mayer Brown, 2025). These policies include comprehensive reviews of trade agreements, tariffs on imports (e.g. on Chinese goods, steel, and aluminum), and discussions of renegotiation of the United States-Mexico-Canada Agreement (USMCA) Wikipedia-style citation: (Wipfli, 2025).

Financial data from the Manufacturers Alliance Foundation indicates that while traditional metrics suggest manufacturing contributes roughly 11% to GDP, the full value chain supporting manufactured goods actually accounts for about one-third of final demand. This broader view shows the significant multiplier effect whereby each dollar of domestic manufacturing value-added ultimately generates an additional $3.60 elsewhere in the economy Wikipedia-style citation: (Manufacturers Alliance Foundation, 2025).

Automation

The push for domestic production has accelerated the modernization and automation of US manufacturing processes. As companies face higher input costs from imported materials (due to tariffs and protectionist measures) and the need to be competitive without relying on global suppliers, increased investment in advanced manufacturing technologies has been evident.

Initiatives such as the Manufacturing USA Program, which seeks to transition new manufacturing technologies quickly to domestic industries, are part of the broader trend toward automation. This focus on technology transfer and scale-up not only boosts domestic production efficiencies but also reduces manual labor dependence, as technologies are integrated into the manufacturing process Wikipedia-style citation: (National Academies, 2025).

Employment

Economic nationalism has had a dual impact on employment within the industrial and manufacturing sectors. On one hand, policies designed to favor domestic manufacturing—such as tariffs and incentives for reshoring production—have spurred job creation in areas that once suffered from offshoring. Direct employment multipliers are illustrated by statistics showing that for each manufacturing job producing value for final demand, an additional 3.4 full-time equivalent jobs are generated in nonmanufacturing sectors Wikipedia-style citation: (Manufacturers Alliance Foundation, 2025).

On the other hand, increased automation driven by domestic-first policies has led to a structural transformation of the labor market. While the overall employment across the value chain benefits from multiplier effects, traditional factory jobs may decline as automated processes and digital systems replace manual tasks. In this context, workforce development and re-skilling emerge as critical components of government recommendations, with initiatives aimed at aligning advanced manufacturing training with the needs of a modern, automated production environment Wikipedia-style citation: (Department of Commerce Impact Report, 2025).

Summary Table of Key Data Points

Note: These trends are a result of a broader shift from globalization to a domestic-first policy approach, which aims to secure national security and competitive positioning in an increasingly contentious global trade environment.

How Does the US’s Shift Toward Economic Nationalism Compare to Trends Observed in Other Major Economies and What Lessons Can Be Learned from International Experiences

US Economic Nationalism: Key Features

The US under a renewed “America First” policy framework has been characterized by: • Aggressive tariff proposals (up to 60% on goods from China and additional tariffs for other key trading partners) aimed at reducing trade deficits, modifying supply chains, and reinvesting in domestic industries Reuters, Mayer Brown. • Expansion of border restrictions and proposals for an 'external revenue service' to collect tariffs and duties to boost government revenues Reuters, Mayer Brown. • Policy shifts that extend major tax cuts and modify trade agreements to favor domestic workers and industries Goldman Sachs Outlook 2025.

Comparative Trends in Other Major Economies

Other advanced economies have displayed similar, though often more measured, moves toward a greater emphasis on domestic priorities:

European Union

• In response to geopolitical tensions and domestic fiscal pressures, the EU has experienced political instability (notably in France and Germany) and debates over debt management. However, the EU’s strategy appears more cautiously defensive than overtly nationalistic, balancing trade competitiveness with pro-growth policies Lazard Geopolitical Advisory. • The EU faces retaliatory risks as US tariffs could impact its industries, with projections that EU trade growth could slow and trigger strategic reassessments in trade relationships BCG.

Japan

• Japan continues its reflationary agenda under the Bank of Japan’s easing and a measured increase in rates towards a 1% target. The focus remains on domestic consumption and stability while being careful not to fully sever global trade linkages Mellon Global Economic Outlook 2025.

Emerging Economies and the Global South

• In regions such as ASEAN and India, economic policy is increasingly leveraging domestic strengths to become alternative centers for manufacturing and exports. Countries aim to benefit from shifting supply chains away from China, reflecting a broader multilateral move prompted by global trade uncertainties BCG.

Comparative Analysis and Lessons Learned

Comparison of Policy Approach: The US opts for aggressive, unilateral measures—such as steep tariffs and redefining trade agreements—as a driver for domestic economic growth. In contrast, the EU and Japan, while adopting more nationalistic tones, implement these policies with caution to avoid provoking severe trade retaliations or destabilizing their fiscal positions.

Implications for Investments, Trade, and Innovation: • Investments: The US’s focus on domestic-oriented policies has encouraged reallocation to mid- and small-cap equities, particularly in sectors deemed critical for domestic growth. In other economies, diversity in asset allocation remains key as firms balance national priorities with global market opportunities Bloomberg. • Trade: All regions are witnessing a potential reconfiguration of global supply chains. However, while the US uses tariffs to directly pressurize trade partners, EU and emerging markets focus on reinforcing regional trade ties and diversifying trade partners to mitigate external shocks BCG. • Innovation: There is a common recognition of the need to maintain competitive technological edges. For example, the US emphasizes tightening export controls and incentivizing domestic innovation to counterbalance reliance on global supply chains, a challenge also confronted by the EU and Japan, though each adapts measures suited to their economic structure Reuters.

Comparative Data Table

Lessons Learned from International Experiences

1. Strategic Balance: Aggressive economic nationalism like that seen in the US can yield domestic benefits but may also provoke international retaliations and supply chain disruptions. Caution and a balance between domestic stimulus and international cooperation—as exemplified by the EU and Japan—can help mitigate these risks.

2. Diversification: A diversified approach in investments—spreading exposure across domestic and international equities—can cushion against volatility introduced by rapid policy changes Bloomberg.

3. Supply Chain Agility: The global shift towards economic nationalism underscores the need for agile supply chains able to adapt to sudden geopolitical shifts. Lessons from emerging markets and regional trade agreements suggest diversification in sourcing and production is vital BCG.

4. Innovation and Technological Competitiveness: Maintaining a competitive edge in innovation is essential as policies increasingly limit reliance on global partners. The focus on domestic R&D and export controls in the US, along with similar measures in Japan and the EU, highlights that investment in technology is a common strategic priority Reuters.

By comparing these examples, the experience across major economies reveals that while the US’s unilateral approach is more aggressive, there are valuable lessons in moderation, diversification, and agility that can inform both investment strategies and broader economic policies.

What Best Practices and Potential Spillover Effects in Trade and Innovation for Enhancing the US Domestic-First Policy Framework

Bilateral and Multilateral Innovation Partnerships

Several reports suggest that forming bilateral and multilateral partnerships can generate significant spillover effects in technology and innovation. For example, the concept of an “ITAR Free Zone” and government‐facilitated data pooling partnerships between the US and allies like Japan can help U.S. companies benefit from shared curated datasets and streamline export controls on critical technical equipment (e.g., semiconductors) CNAS, Forging an Alliance Innovation Base. In addition, establishing joint dialogues (such as on research integrity between US and Tokyo research universities) serves as a platform for adopting best practices for managing risks and protecting technological advances.

Harmonization of Trade Policies and Reciprocal Measures

Best practices from international partners indicate the importance of harmonizing trade and tariff policies. Jaw-dropping examples include insisting that trade partners match U.S. tariff levels in cases where other countries, for instance, have higher tariffs on U.S. exports (A Techno-Economic Agenda for the Next Administration). Aligning domestic policies with reciprocal actions can improve market conditions and spur investment while ensuring that the benefits from domestic R&D are not undercut by foreign trade practices.

Digital Cohesion and Human Capital Exchanges

Digital trade and innovation policies can benefit from engaging in robust digital dialogues. Organizing transatlantic and overseas digital delegations and dialogue on cloud computing interoperability, artificial intelligence ethics, and related regulatory standards have been proposed as initiatives that can not only align norms but also create an exchange of best practices on technology governance (Designing a U.S. Digital Development Strategy). Moreover, such international exchanges can help shape a domestic framework that fosters the flow of ideas and talent, thus ensuring long-term spillover effects that boost domestic innovation systems.

Institutional Reforms Inspired by International Practices

Institutional reforms and national competitive councils, as suggested in various reports, can be informed by practices abroad. For instance, a National Competitiveness Council (NCC) could coordinate advanced-industry innovation policy, drawing on successful models from allies that have effectively managed and promoted advanced manufacturing sectors (see also ITIF’s Analysis on U.S. Innovation System). Using these insights, domestic reforms can emphasize a blend of strategic R&D investments with regulatory reforms that encourage industry collaborations across borders.

Spillover Effects on Investment, Trade, and Innovation

International best practices in setting innovation-friendly environments can create spillover effects that positively impact investments and domestic production. Notable practices include:

• Reduced Barriers to Investment: By offering clear guidelines on investment screening and by reducing export control barriers for allied states, the US could attract higher quality foreign investments, thereby strengthening domestic industries CNAS, Forging an Alliance Innovation Base.

• Reciprocal Trade Measures: Adjusting tariffs in a reciprocal manner with international partners could create more balanced global trade, thus mitigating negative spillovers from protectionist practices abroad (A Techno-Economic Agenda for the Next Administration).

• International Standards and Norm Setting: Engaging actively in multilateral forums to establish unified tech standards and digital norms can have a profound spillover impact on domestic innovation ecosystems by ensuring that regulatory reforms are in step with international trends.

By analyzing these international best practices, the US government can adopt a tailored domestic-first framework that leverages both the strategic insights and the spillover effects from aligned foreign policies. This symbiotic relationship emphasizes mutual benefits in trade, technology protection, and innovation advances.

Table of Key Best Practices and Spillover Effects

This comprehensive approach, which integrates international best practices with targeted domestic reforms, offers both immediate and long-term benefits for US investments, trade, and innovation within a domestically-focused policy framework.

In What Ways Has the US Technology Sector Responded to Changes in Funding Models, R&D Intensity, and Talent Retention as a Result of Domestic-First Policies

Changes in Funding Models

Domestic-first policies are prompting US technology companies to reorient funding strategies to align with protectionist and local investment priorities. Key responses include:

• Increased Venture and Government Funding: US tech firms and startups are receiving targeted funding from domestic venture capital and federal programs aimed at bolstering local innovation. With policies favoring domestic supply chains and innovation, funding is being channeled into projects that reduce dependence on global markets Deloitte Insights.

• Adoption of Usage-Based and Strategic Investment Models: The sector is moving from traditional capitalization toward flexible funding models such as usage-based pricing in AI and cloud services. Many companies are recalibrating their business models to raise funds based on performance and technology usage, even as M&A trends shift in light of domestic priorities Forrester.

• M&A Activity as a Strategic Tool: With increased regulatory benefits and trade barriers affecting foreign operations, US technology companies are increasingly acquiring domestic firms or engaging in reverse acquihire strategies to secure local talent and technology assets Deloitte Insights.

Responses in R&D Intensity

Domestic-first policies are also affecting the R&D practices in the US tech sector:

• Rising R&D Intensity despite Flat Productivity: Empirical evidence from federal research indicates that R&D intensity in US manufacturing, which often overlaps with tech hardware and semiconductor sectors, has been steadily on the rise. While traditional productivity gains have stalled, companies are increasing their R&D investments, reflecting an effort to innovate domestically even amid global competitive forces Federal Reserve Bank of New York.

• Enhanced Focus on Specialized Technologies: The heightened emphasis on domestic value chains (e.g., semiconductors and AI hardware) has led firms to invest heavily in niche R&D areas, including ASIC infrastructure and postquantum cryptography. These investments aim to secure technological independence by developing capabilities that can overcome the limitations imposed by foreign competition Deloitte Insights.

• Standardization and Process Innovation: Companies are simplifying and standardizing their technology landscapes—an approach that improves collaboration and accelerates AI and automation. This strategy has been highlighted in discussions on improving data and process mastery to support advanced R&D efforts, ensuring that innovations meet domestic compliance and efficiency standards Applied Clinical Trials Online.

Talent Retention Strategies

As domestic-first policies shift market dynamics, the technology sector has also rethought its talent management and retention practices:

• Competitive Compensation and Benefits: There is an increased emphasis on retaining talent through robust compensation packages, benefits enhancements, and clear career development paths. US tech companies are focusing on recruiting locally by offering competitive salaries, flexible work arrangements, and targeted perks that are critical in a tight labor market TalentHR.

• Upskilling and Continuous Learning: With the rapid evolution of technology, firms are investing in continuous education, upskilling, and mentorship programs to develop internal talent. This internal focus not only aids in retention by filling critical skills gaps but also ensures long-term strategic agility by reducing overreliance on external talent Info-Tech Research Group and SHRM.

• Enhanced Employer Branding and Culture Initiatives: To attract and keep talent in a domestic-first landscape, companies are doubling down on employer branding. They are building cultures that emphasize transparent leadership, work-life balance, and employee well-being—factors that are critical when competing in both domestic and international talent markets CSS ProSearch.

• Adapting to a Gig and Hybrid Workforce Model: With trends in remote work and a rise in contract-based roles, firms are also reconfiguring their workforce strategies. This involves creating talent pipelines that can efficiently integrate contract workers, support international remote hires, and offer flexible working models, all crucial for retaining top talent amidst shifting economic policies LinkedIn Pulse and HR Dive.

Summary Table of Key Responses

This synthesis shows that the US technology sector is adapting comprehensively to domestic-first policy shifts by reworking how it funds innovation, intensifying its R&D activities in critical areas to reduce foreign dependencies, and transforming talent management practices to secure a competitive and sustainable workforce.

Broad Effects of Economic Nationalism on the US Service Industries and the Overall Economic Ecosystem

Impact on Service Industries

Economic nationalism has introduced a series of policy measures that are directly reshaping the environment in which US service industries operate. For example, the focus on domestic-first policies may lead to enhanced protectionism—through tariffs, export controls, and tightened investment screening—that disproportionately affects sectors predicated on intangible, high-tech, and innovation-driven services. According to research by Philip Luck at CSIS, the production and use of intangible services is a critical front in the economic competition between the US and China. However, the imposition of tariffs and restrictive export controls can raise operational costs and add regulatory complexity for service firms, ultimately impeding ongoing innovation and the natural compounding benefits of smart policy over time [citation: CSIS].

Moreover, adjustments in business immigration policies—such as stricter screening and potential re-interpretations of citizenship guidelines—could reduce the flow of international talent. Service sectors, which heavily depend on skilled professionals and global expertise, are at risk of experiencing an immigrant brain-drain. This could reduce the sector’s competitiveness and its ability to remain at the cutting edge of innovation [citation: NatLawReview].

Effects on Trade and Innovation

Economic nationalism has broader implications for the overall economic ecosystem, particularly in supporting trade and innovation. The restructuring of trade policies under initiatives such as the America First Trade Policy involves comprehensive reviews of US trade relations, a rebalancing of trade deficits, and adjustments to export controls and intellectual property protections [citation: Federal Register, DLA Piper].

Key consequences include:

• Increased Policy Uncertainty: The rapid timelines for policy reviews and the announced potential imposition of new tariffs (targeting primarily China, Canada, and Mexico) create an environment of heightened uncertainty. This uncertainty affects trade relations across sectors indirectly, as businesses in the service industry face unpredictable changes in international cost structures and supply chain configurations [citation: S&P Global].

• Rising Costs and Reduced Innovation Incentives: While tariffs are intended to protect domestic industries, they also increase input costs for companies that provide services reliant on global supply chains and cross-border expertise. Over time, such costs can dampen investment in innovation. For high-tech services, which require continual reinvestment in research and development, these additional regulatory burdens and financial pressures may slow down technological advancements.

• Trade Flow Shifts and Domestic Investment Focus: As global supply chains are reoriented due to new tariffs and protectionist measures, there is an observable shift towards regional trade blocs and increased domestic sourcing. This redirection, while bolstering certain domestically oriented sectors, may isolate service industries from broader innovation ecosystems that benefit from diverse, international collaboration. In the long term, this could result in reduced global competitiveness unless complemented by policies fostering domestic R&D and talent retention [citation: BCG, DLA Piper].

Financial and Regulatory Data Points

Below is a summary of some key financial and policy indicators relevant to the discussion:

Synthesis

In summary, economic nationalism in the US is reshaping both the structure and dynamics of its service industries and the broader economic ecosystem. The reduced emphasis on globalization via heightened tariffs, stringent export controls, and tighter immigration rules poses challenges to innovation—especially in sectors reliant on global talent and advanced technological services. At the same time, while the shift to domestic investment may protect certain sectors, the overall trade environment becomes less predictable, raising operational costs and potentially reducing the long-term growth in productivity and innovation [citation: CSIS, Federal Register].

This multi-faceted impact underscores the critical need for balanced policies that safeguard domestic industries without stifling the innovation and global collaboration that are hallmarks of the vibrant US service sector.

Impact of Domestic Subsidies and Protectionist Measures on the US Agriculture Sector

Domestic Subsidies and Local Production

Domestic subsidies in the US, such as direct government payments and commodity programs (e.g., the ARC and PLC programs), have significant impacts on local production. Key points include:

• The USDA provided direct farm payments—with figures reported such as $10.2 billion in 2023—which help stabilize farm incomes even when market prices decline. These payments indirectly support local production by giving farmers the security to produce a range of commodities. USDA ERS

• However, subsidy structures tend to concentrate on a limited number of commodity crops, reinforcing production patterns that may not be the most efficient or sustainable. Programs like ARC and PLC are designed with reference price adjustments that could disproportionately benefit larger producers, potentially leading to market distortions, overproduction in certain crops, and reduced incentives for diversification.

• Policy proposals, such as those found in Project 2025, indicate a shift toward recalibrating subsidies to focus on direct disaster assistance rather than dampening market dynamics through blanket subsidies. These reforms are aimed at cutting programs like the sugar protection scheme, which keeps domestic prices higher than international levels by limiting imports, and repealing some of the main commodity subsidy programs. Project 2025

• Additionally, USDA budget summaries reflect a strategic move toward investing in local food systems and urban agriculture. These investments are intended to enhance supply chain resiliency and support direct farmer-to-consumer transactions, promoting local production and reducing reliance on extended global supply chains.

Protectionist Measures and Trade Dynamics

Protectionist measures, including tariffs and import restrictions, have strongly influenced the trade dynamics of US agriculture:

• Domestic protectionist policies like the sugar program are designed to shield local production by restricting imports. By keeping domestic prices elevated, these measures protect local industries but also contribute to a trade imbalance by distorting competitive pricing.

• Tariffs, particularly those emphasized under protectionist trade strategies, have disrupted export markets. Historical data indicate that during periods of aggressive tariff policies—for instance, during the US–China trade conflict—losses reached around $27 billion in agricultural exports. Key products such as soybeans and pork were hit hardest, as China shifted to alternative suppliers. UCS Blog

• In proposed future policy landscapes, the imposition of new tariffs on agricultural imports from key partners like Canada and Mexico could create a shift favoring domestic producers by limiting competitively priced foreign goods. However, these tariffs also risk triggering retaliatory tariffs that could further disrupt trade flows and increase input costs for US farmers, thereby straining farm finances.

Combined Impact on Sector Dynamics

A synthesis of the data reveals that domestic subsidies and protectionist measures have created a complex landscape in the US agriculture sector:

• Subsidies provide a financial safety net that stabilizes local production, ensuring that farmers can maintain operations even during periods of market volatility. The resultant production patterns, however, are heavily influenced by which commodities receive support. This selective support can lead to overproduction in certain sectors while discouraging diversification and innovation.

• At the same time, protectionist measures safeguard domestic agriculture by shielding it from lower-priced imports through programs that limit imports (e.g., the sugar program) or impose tariffs. While such measures can bolster local market strength, they also tend to create trade frictions, discourage exports, and make domestic markets less competitive in a global context.

• Both factors interact by creating an environment of reduced international price competition where domestic production is prioritized. This domestic-first approach can result in higher prices for consumers and may encourage the public sector to reallocate focus toward enhancing localized food systems and urban agriculture as part of a broader strategy to mitigate supply chain disruptions.

Financial Data and Policy Projections

This balance of support through subsidies and protectionist trade policies underscores a broader move in US economic nationalism. This approach aims to prioritize domestic production and manage trade imbalances, albeit at the potential cost of international market competitiveness and higher prices for consumers.

Citations

1. USDA ERS, Farm Sector Income Forecast. Available from: USDA ERS.

2. Project 2025, Farm Programs and Policy Recommendations. Available from: Investigate Midwest.

3. UCS Blog, Trump’s Tariffs Impact Analysis. Available from: UCS Blog.

Longitudinal Trends in Domestic Investment, Trade Balances, and R&D Expenditures Before and After the Shift Toward U.S. Economic Nationalism

Domestic Investment and Foreign Direct Investment (FDI)

• Pre-Nationalism Period:

• In the years prior to the overt shift from globalization to a more domestic-first policy stance, U.S. FDI inflows were robust. For example, in Q1 2016 the net FDI inflow was recorded at approximately US$146.5 billion, reflecting strong attractiveness for long‐term investments and expansive cross-border corporate activities 1(https://www.piie.com/blogs/trade-and-investment-policy-watch/cost-trumps-economic-nationalism-loss-foreign-investment).

• Post-Nationalism Period:

• With the advent of economic nationalism—evident in policies such as the imposition of tariff walls, tougher regulatory scrutiny, and measures to curb foreign investments—the inflow of FDI declined significantly. For instance, net FDI inflows fell to about US$89.7 billion in Q1 2017 and further dropped to approximately US$51.3 billion in Q1 2018 1(https://www.piie.com/blogs/trade-and-investment-policy-watch/cost-trumps-economic-nationalism-loss-foreign-investment).

• Moreover, domestic investment by U.S. companies also exhibited lagged adjustments. Investors—both domestic and foreign—appeared to reassess long-term commitments in response to a perceived decline in the U.S. market’s openness, suggesting that the shift has contributed to a notable shortfall or delay in domestic investment flows.

• Additional analysis from Federal Reserve research indicates that U.S. direct investment abroad fell sharply in 2018, partly driven by policy changes such as the Tax Cuts and Jobs Act (TCJA) which altered incentives for reinvesting earnings overseas. This suggests that the domestic investment landscape became more inward-focused, even as cross-border flows contracted 2(https://www.federalreserve.gov/econres/notes/feds-notes/what-happened-to-foreign-direct-investment-in-the-united-states-20200213.html).

Trade Balances

• Pre-Nationalism Period:

• Historically, the U.S. trade balance dynamics were influenced by increased global integration. Growth in trade volumes, driven partly by globalization, often resulted in sizable trade deficits. Studies indicate that in earlier decades, while the deficit as a share of GDP was moderated, a rising trade share of GDP pushed the deficit higher in relative terms 3(https://www.nber.org/papers/w25563).

• Post-Nationalism Period:

• With the turn toward economic nationalism, policies such as higher tariffs and restrictions on foreign trade have been deployed. However, research, including charts correlating applied tariff levels and trade deficits, shows that despite efforts to protect domestic industries, countries with higher tariffs (including the U.S.) often still exhibit larger deficits 4(https://www.piie.com/research/piie-charts/countries-higher-tariffs-have-larger-trade-deficits).

• Moreover, dynamic trade models decompose fluctuations in the U.S. trade balance into components such as integration effects and business cycle asymmetries. Although nationalist policies have led to increased protectionism rhetoric, these models suggest that only a portion of net trade fluctuations can be directly attributed to policy-induced changes, with much of the persistent deficits reflecting underlying trends such as domestic savings behavior and the structure of global supply chains 3(https://www.nber.org/papers/w25563).

R&D Expenditures and Innovation

• Pre-Nationalism Period:

• U.S. R&D expenditures have long been characterized by substantial contributions from the business sector. For instance, data from the National Science Foundation show that, prior to the nationalist turn, total U.S. R&D expenditures were robust—with figures around US$495 billion in 2015—and with business performing the majority share of experimental development 5(https://ncses.nsf.gov/pubs/nsb20246/figure/RD-1).

• The international position of the U.S. as a leader in innovation was supported by both federal funding and significant private sector participation, with continuous growth in applied research and experimental development underpinning long-term innovation capacity.

• Post-Nationalism Period:

• In the nationalist era, concerns have emerged regarding stagnation in U.S. innovation. Commentators have noted that despite the country’s historical leadership, a serious national conversation on expanding U.S. R&D spending is overdue 6(https://conversableeconomist.blogspot.com/2020/02/global-r-stagnant-us-position.html).

• The shift toward a domestic-first approach may influence the pattern of R&D investments, with some indicators suggesting that while the private sector remains the primary driver—particularly for experimental development—the overall R&D intensity has not accelerated to match changing global dynamics. Additionally, policy uncertainty and debates over fiscal priorities in a more protectionist environment raise concerns about potential long-term underinvestment in basic and applied research 7(https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5206685/figure/f2/?report=objectonly).

Summary Table of Key Data Points

Footnotes

1. Peterson Institute for International Economics, “The Cost of Trump’s Economic Nationalism: A Loss of Foreign Investment in the United States” https://www.piie.com/blogs/trade-and-investment-policy-watch/cost-trumps-economic-nationalism-loss-foreign-investment ↩ ↩2 ↩3 ↩4

2. Federal Reserve Board, “What Happened to Foreign Direct Investment in the United States?” https://www.federalreserve.gov/econres/notes/feds-notes/what-happened-to-foreign-direct-investment-in-the-united-states-20200213.html ↩ ↩2

3. National Bureau of Economic Research, “The Dynamics of the U.S. Trade Balance and Real Exchange Rate: The J Curve and Trade Costs?” https://www.nber.org/papers/w25563 ↩ ↩2 ↩3

4. Peterson Institute for International Economics, “Countries with Higher Tariffs Have Larger Trade Deficits” https://www.piie.com/research/piie-charts/countries-higher-tariffs-have-larger-trade-deficits ↩ ↩2

5. National Center for Science and Engineering Statistics, “Research and Development: U.S. Trends and International Comparisons” https://ncses.nsf.gov/pubs/nsb20246/figure/RD-1 ↩ ↩2

6. Conversable Economist, “Global R&D: The Stagnant US Position” https://conversableeconomist.blogspot.com/2020/02/global-r-stagnant-us-position.html ↩ ↩2

7. National Center for Biotechnology Information, “Trends in research intensity” https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5206685/figure/f2/?report=objectonly ↩ ↩2

Timeline of Key Events from Globalization to Economic Nationalism in the US

1. Post-World War II Era (1945-1970s)

• 1945: Establishment of international organizations like the United Nations, World Bank, and International Monetary Fund to promote global cooperation and trade. This period marked the beginning of the liberal world order, which aimed to foster global economic integration. CFR Education

1. Rise of Globalization (1980s-2000s)

• 1980s: The US faced increasing competition from global markets, leading to concerns over trade imbalances and the decline of domestic industries. This period saw the beginning of economic nationalism as a response to globalization pressures. Economic Policy Institute

• 1992: The North American Free Trade Agreement (NAFTA) was signed, further integrating the US economy with Canada and Mexico, and intensifying debates over the impacts of globalization. Economic Policy Institute

1. Shift Towards Economic Nationalism (2010s-Present)

• 2016: The election of Donald Trump marked a significant shift towards economic nationalism, with policies focusing on America First and withdrawing from international agreements like the Trans-Pacific Partnership (TPP). CEPR

• 2018: Implementation of tariffs on Chinese imports as part of a trade war, reflecting a move towards protectionist policies aimed at boosting domestic industries. Cato Institute

1. Current Trends and Implications

• The ongoing shift towards economic nationalism has led to increased support for policies that prioritize domestic industries and reduce foreign dependency. This has implications for trade, investments, and innovation, as the US navigates the balance between global integration and national interests. Policy Magazine