The Biden administration this week reported that he will pursue an uncompromising approach to economic relations with China, saying he will apply the tariffs set under the Trump administration and target Chinese subsidies for private industry.
The moves occur months after the US Senate passes $ 250 billion bipartisan spending package intended to counter Chinese industrial support by investing in technological research and improving the ability of the United States to manufacture essential goods, such as semiconductors.
In a new interview, Dell Technologies (DELL) CEO Michael Dell called the US-China economic relationship “icy” and said he welcomed US support for the tech sector as a way to counter such subsidies. in China.
“The relationship is a little icy right now, and we could be heading towards a bipolar world,” he says. “It certainly creates challenges.”
“I think it’s great that the United States is now starting to focus on some of these strategic industries in the future,” he said.
A global chip shortage caused by the pandemic has drawn attention to the United States’ reliance on Chinese manufacturing for the critical parts that make up products from laptops to smartphones to cars.
Despite long-standing US concerns over Chinese industrial subsidies, China last year announced $ 1.4 trillion in technology investments through 2025 that aim to support key areas such as artificial intelligence and wireless infrastructure in increasing competition with US businesses.
In recent months, a Chinese crackdown on big tech companies As e-commerce giant Alibaba (BABA) and research giant Baidu (BIDU) has been accompanied by continued support for industries such as advanced manufacturing.
Industrial policy, government-led support for preferred industries, gained a foothold in the United States during busy historical times like the aftermath of the Great Depression or the Cold War. But in recent years, the United States has largely avoided such measures, the Council on Foreign Relations said in a report released in March.
“For decades there was no industrial policy – that was kind of a dirty phrase,” Dell explains. “Nobody wanted to talk about industrial policy.”
“But when you have an amazing nation like China that is deterministically investing in these strategic industries, and the United States is doing absolutely nothing and is sort of digging into areas like semiconductors, that ‘ is a real danger, ”he said. “We’re sort of seeing it.”
Speaking to Yahoo Finance, Dell praised the bipartisan $ 250 billion technology investment bill, dubbed the U.S. Innovation and Competition Act of 2021, which was passed by the Senate in May.
The bill has yet to come for a vote in the House of Representatives.
“It’s great that the US is focusing on this now,” Dell says. “I hope it’s not too late.”