Treasury Secretary Scott Bessent said Friday that decades of U.S. industrial policy have left the country strategically vulnerable [1, 2].
This assessment suggests that the current state of American production is insufficient to ensure national security during global crises. By prioritizing short-term economic efficiency over long-term resilience, the U.S. has lost critical capabilities in sectors essential for modern infrastructure, and defense.
Speaking at the Reagan National Economic Forum, Bessent delivered a speech titled “While America Slept” [1, 2]. He said that the hollowing out of the domestic manufacturing base has created dangerous dependencies on foreign adversaries and unstable supply chains.
Bessent identified semiconductors, rare earth elements, and medicines as areas where productive capacity has diminished [1, 2]. The secretary said that the shift toward globalized sourcing left the U.S. unable to rapidly scale production of these essential goods during emergencies.
According to Bessent, the systemic failure resulted from a policy approach that viewed manufacturing as a cost to be minimized rather than a strategic asset to be maintained [1, 2]. He said that the result is a fragile industrial ecosystem that cannot support the country's strategic needs.
While the Treasury Department has not yet detailed specific legislative remedies, the speech signals a shift toward more aggressive industrial intervention. Bessent said the government must move away from the policies that allowed these vulnerabilities to develop over several decades [1, 2].
“Decades of U.S. industrial policy have left the country strategically vulnerable.”
Bessent's rhetoric indicates a pivot toward 'economic statecraft,' where the Treasury Department views industrial capacity as a primary tool of national security. By framing the loss of semiconductor and pharmaceutical production as a strategic failure, the administration is laying the groundwork for policies that may include targeted subsidies, tariffs, or mandates to force the return of critical manufacturing to U.S. soil.
