The United States is currently undergoing a period of massive change in its economy, which is being spearheaded by three major pieces of federal infrastructure and industrial policy legislation: the Infrastructure Investment and Jobs Act (IIJA), the Creating Helpful Incentives to Produce Semiconductors (CHIPS) Act, and the Inflation Reduction Act (IRA). These new programs represent not only a massive investment in select parts of the US economy, but also significant changes in how the US invests and manages its economy through the use of industrial policy.

This chapter reviews these changes in the “how” of US industrial policy and federal investment and discusses two of the challenges that the US government faces as it attempts to orchestrate major changes to its economy. The first is a regulatory system designed to slow or otherwise constrain capital investment and growth. The second consists of unique aspects of US governance and its role in the global economy that will make state-led direct investment and other industrial policy programs challenging to implement.