For decades, Europeans have believed that the prosperity of the United States is based on a free marketplace and entrepreneurship. Then, a small over 10 years ago, they changed their minds.. This story helped overthrow economist Marian Mazzucato. In its 2013 book Entrepreneurship State, it argued that many of the most crucial innovations of fresh decades — the Internet, GPS and smartphone technologies — was initiated by government investments. Mazzucato claims that the secret of industrial policy lies in defence spending, targeted subsidies and state-driven innovation.
Then came the "bidenomics" which struck the final blow of Europe's feeling that America is simply a kind of free marketplace fairy tale. president Joe Biden's law on inflation simplification of $369 billion (about PLN 1.5 billion), which offered support for environmentally sustainable industries, in peculiar American electrical vehicles, was seen in Europe as a scandalous effort by the US government to bargain investment from the EU.
The Union has reacted by strengthening its obsession with the analogous state industrial policy, focusing on European leaders and speedily approving grants.
However, trying now to build your own industrial strategy, Europe ignores the large breakthrough. The rules of the game have changed again: the next phase of American economical policy does not concern subsidies, state-driven growth or preferential sectoral regulations — it is about breaking this model into pieces.
The era of “bidenomics” has already been replaced by a fresh imagination rooted in what can be called ‘national capitalism’. This is simply a doctrine of extremist liberalisation that rejects state intervention, includes privatisation and is mostly based on marketplace forces to transform the economy — although within the protection system.
For any reason, it does not scope Brussels, which is persistently fighting in the past war, using the tenure tools of the vanishing era. The key to the ongoing misdiagnosis is blindness to the actual meaning and intent customs duties under threat by US president Donald Trump.
Trade objectives are not behind customs, designed to weaken neighbouring economies, or primitive protectionism. Customs are to change the rules of the game. Their goal is to isolate the United States, which begins a extremist marketplace reorganisation, removing the destabilising and frequently corruptive impact of the state economical models of another countries.
The United States is building an economical wall
Officials in Brussels respond and They do not see fundamental reorientation, although Scott Bessent, to be Secretary of the TreasuryHe couldn't be more unambiguous.
"Free trade is to any degree in conflict with free markets," he wrote in a hospitable article for "The Economist". He criticised decades of disruption caused by globalisation.
Bessent's imagination is simply a extremist reset focused on ending national subsidies, confronting abroad disturbances and creating equal opportunities in which Real marketplace forces — not state interventions — decide the results.
EPA/JIM LO SCALZO / PAPproceeding of Scott Bessent, candidate for the position of Secretary of the Treasury, before the legislature Finance Commission. Washington, January 16, 2025.
He explains: “There will be extended tariffs more effective than micro-economic interventions, specified as industrial policy, which mostly trust on the government to choose winners and losers."
To put it simply, The United States must build a wall to defend against products from the global economyto be able to introduce much more extremist liberalisation at home.
The evidence of this transition to liberalisation is everywhere. In addition to a notable taxation cuts program, Trump America has eliminate green energy subsidies and electrical vehicles. This threatens the key provisions of the inflation simplification bill. Fossil fuels will compete on equal terms, after years of marginalisation by preferential renewable energy policies.
Trump camp even offered to privatize American message or loaners Fannie Mae and Freddie Mac, while proposing marketplace reforms of education and space exploration.
America abandons industrial policy
This change is even clearer The fresh president's approach to monopolies. Andrew Ferguson's nomination to lead the national Trade Commission signals an aggressive antitrust program that puts competition first.
— Without vigorous enforcement of our competition rules, our free enterprise strategy He would no longer be a wonderful engine of mass growth., who transformed the world, stated Ferguson during an interrogation before the legislature committee.
For comparison, Europe's approach under the Digital marketplace Act seems mild — a bureaucratic consequence to the power of large Tech, not an effort to break up the monopolies of Teddy Roosevelt.
This is not America insistent on industrial policy — This is America abandoning her.. Even in defence, which has long been the cornerstone of American industrial strategy, Trump's programme reflects the ethos of national capitalism.
EPA/SHAWN THEW/ PAPproceeding of Pete Hegseth, candidate for the position of Secretary of Defense, before the legislature Armed Services Commission. Washington, January 14, 2025.
Pete Hegseth, Defence Secretary candidate, clearly indicated that I want to break the rooted relation between the Pentagon and the contractors.. This is simply a imagination of open competition in which smaller, agile companies can challenge the old guard.
"We gotta usage marketplace forces to give precedence to competition and maximize innovation," Hegseth wrote in consequence to the legislature Armed Services Committee before the approval proceeding in January. And again, This is in clear contrast to the European Defence Strategywhich continues to defend national champions under the appearance of strategical autonomy.
Meanwhile, in the field of finance, Trump's virulent remarks on bank rescue by the government in 2023 announce what is to come. His exploration bitcoin reserves — which, according to supporters, would prevent central banks from supporting banks by printing money — points out that the era of state-supported banks is likely to be over.
But the most extremist component of Trump's imagination may be redefinition of the social contract with the American peoplewhere state protectionism moves from micro to macro-management. Europe does not see how the battlefield has changed. And the price of this miscalculation may be high.
