The writer is an FT contributing editor and executive director of American CompassHaving exhausted all other options, US policymakers are finally doing the right thing for domestic manufacturing: embracing industrial policy to channel capital towards expanding the nation’s productive capacity.

Between the Infrastructure Investment and Jobs Act, the Chips and Science Act, and the clean energy programmes in the inaptly named Inflation Reduction Act, hundreds of billions of dollars in public spending and subsidies have prompted a building surge. Spending on US manufacturing construction nearly tripled from mid-2021 to mid-2023 after remaining flat for the previous six years. But celebration of a “manufacturing renaissance”, as US Steel chief executive David Burritt has called the surge, is premature.

Certainly, a policy revolution has occurred. Leaders across the political spectrum have embraced the necessity of a public role in fostering productive investment. Many economists are acknowledging that making things matters in ways markets will ignore.