Inside the techno-industrial policy playbook: shipbuilding, critical minerals, and restoring American manufacturing
May 6, 2025 with Kelvin Yu
Key Points
- Kelvin Yu and four think tanks release a 27-proposal industrial policy playbook arguing America's manufacturing decline stems from policy choices, not inevitability, requiring sector-specific combinations of regulatory fixes, state capacity, and subsidies.
- The playbook identifies Navy design churn as shipbuilding's core bottleneck despite China producing 230 times more ship tonnage, suggesting targeted governance reform can move faster than blanket subsidies.
- The central challenge remains mobilizing sustained political will for diffuse industrial decline when historical precedents like Apollo required a singular shock like Sputnik.
Summary
Kelvin, a Princeton dropout turned industrial policy advocate, released a 27-proposal playbook co-authored with four think tanks — the Foundation for American Innovation (FAI), the Institute for Progress (IFP), American Compass, and the New American Industrial Alliance (NIA). The playbook spans three categories: industrial power, national security, and frontier innovation, with domain experts writing each section.
The central argument is that America's industrial decline is a policy choice, not an inevitability. The Biden administration attacked the problem through large-scale subsidies in chips, energy, and manufacturing. The Trump administration has focused on removing structural barriers — trade policy, non-tariff barriers — but Kelvin argues tariffs alone are insufficient. Every specific challenge, whether critical minerals, shipbuilding, or hypersonics testing infrastructure, requires its own combination of regulatory fixes, state capacity building, and targeted subsidies.
Shipbuilding
China produces 230 times more ship tonnage than the United States. The playbook's shipbuilding proposal, written by Brian Potter and Austin Bернон, focuses on one underappreciated bottleneck: the Navy's constantly shifting design requirements and planning processes. Kelvin frames it as a complement to broader legislation like the SHIPS Act rather than a comprehensive fix.
Critical minerals and capital mobilization
On getting large-scale private capital into industrial finance, the playbook draws on a piece by Julius Krein of American Affairs and a separate proposal by Sam Hammond on using SBA authorities to incentivize investment in small and mid-sized manufacturers. Kelvin is receptive to the idea of tiering carried interest tax treatment to favor domestic industrial investment over offshore deployment, though he stops short of formally endorsing a specific mechanism.
The Sputnik problem
The Apollo program is the clearest historical precedent Kelvin cites: in under a decade, the U.S. directed 400,000 people, 20,000 companies, and 4.4% of the federal budget toward the moon, going from laggard to leader in missile and space technology. The harder question now is whether a slow, diffuse industrial decline can generate the same urgency as a single shocking moment. Kelvin acknowledges it is a genuine challenge — some analysts believe the U.S. won't mobilize seriously until a Taiwan scenario forces the issue — though he points to COVID, Ukraine, and October 7th as partial inflection points that have already shifted public awareness.
The Trump administration moved fast enough on defense procurement and energy reform that several playbook sections needed updating after executive orders were issued before publication. The broader bet the playbook is making is that bipartisan consensus on reindustrialization now exists, and what has been missing is the granular, sector-specific policy work to act on it.