Jonas Nahm
@jonasnahm.com
Associate Professor at Hopkins/SAIS. Former White House industrial strategy economist. Industrial policy, trade, climate, economic security. Views my own. DC | HNL. 🏳️🌈
Economics
40%
Political science
32%
Jonas Nahm
@jonasnahm.com
· 3d
Economy added 130K jobs in January, but manufacturing gained just 5,000—after a long slide in the fall. Tariffs were supposed to bring production back, but factories still aren't hiring.
Jonas Nahm
@jonasnahm.com
· 5d
If we want reshoring to translate into durable jobs and successful local industries, we need a domestic competitiveness strategy. 8/8
Jonas Nahm
@jonasnahm.com
· 5d
The lesson for U.S. industrial policy isn’t simply to block foreign firms. It’s to think seriously about how domestic firms gain access to technology, capital, and skills. 7/
Jonas Nahm
@jonasnahm.com
· 5d
That’s the tension this case exposes: tariffs can shift where production happens, but they don’t by themselves close productivity gaps. 6/
Jonas Nahm
@jonasnahm.com
· 5d
Protection and reshoring can create incentives to modernize — but without financing and support for upgrading, they can also accelerate the exit of local firms that can’t invest fast enough. 5/
Jonas Nahm
@jonasnahm.com
· 5d
By contrast, many incumbent U.S. plants are decades old. Even well-run firms that have squeezed costs and invested at the margin struggle to finance wholesale upgrading. 4/
Jonas Nahm
@jonasnahm.com
· 5d
The Ohio plant won because it arrived with newer capital, higher automation, and production systems built for today’s auto industry. 3/
Jonas Nahm
@jonasnahm.com
· 5d
The case raises a basic question: if tariffs and incentives succeed in bringing manufacturing investment back to the U.S., are domestic firms actually in a position to compete? 2/
Reposted by Robert Wolfe
Jonas Nahm
@jonasnahm.com
· 5d
The Chinese Factory That Opened in the U.S. and Clobbered Its Rivals
President Trump has pressured trading partners for investment in U.S. manufacturing plants. What if local industries can’t compete?
www.wsj.com
This WSJ story about a Chinese auto-glass plant in Ohio is interesting less as a China story than as a window into the challenges of U.S. industrial policy going forward. 1/
www.wsj.com/business/tar...
www.wsj.com/business/tar...
Jonas Nahm
@jonasnahm.com
· 5d
Industrial policy isn’t about copying China’s labor or environmental model. It’s about learning from the parts we’ve long ignored: finance, scale, coordination, and learning. 11/11
Jonas Nahm
@jonasnahm.com
· 5d
The danger of repeating tired causal stories is that it leads us to fight the wrong battle and distracts from the harder work of rebuilding industrial systems rather than just permitting mines. 10/
Jonas Nahm
@jonasnahm.com
· 5d
Recycling and waste recovery help on the supply side, and they deserve more attention. But without processing capability and financing, recovered materials just flow back into the same bottlenecks. 9/
Jonas Nahm
@jonasnahm.com
· 5d
If the diagnosis instead focuses on finance and coordination, the policy response looks very different: long-horizon public finance, support through price downturns, domestic processing capacity, and strong demand pull from downstream industries. 8/
Jonas Nahm
@jonasnahm.com
· 5d
But we can’t, and definitely shouldn’t, respond by lowering wages or weakening environmental protections. 7/
Jonas Nahm
@jonasnahm.com
· 5d
This matters because causal stories shape policy responses. If the diagnosis is that China cheated on labor and the environment, the response becomes tariffs, reshoring mandates, and regulatory rollback. 6/
Jonas Nahm
@jonasnahm.com
· 5d
These industries are not labor-intensive. They are capital-intensive, scale-dependent, and reliant on learning by doing. The key advantage wasn’t cheap labor, it was patient capital and system-level coordination. 5/
Jonas Nahm
@jonasnahm.com
· 5d
The real drivers were less dramatic but more decisive: state-backed financing at scale, tolerance for long periods of losses, coordinated investment across value chains, and guaranteed downstream demand. 4/
Jonas Nahm
@jonasnahm.com
· 5d
If lax standards were the main driver, other low-standard countries should have captured far more of the rare-earth value chain. Instead, China uniquely consolidated scale and processing capacity, even as its regulations tightened and wages rose. 3/
Jonas Nahm
@jonasnahm.com
· 5d
Yes, regulatory arbitrage played some role early on, especially when the US and Europe exited hazardous processing. But that explains Western withdrawal, not China’s subsequent dominance. 2/
Jonas Nahm
@jonasnahm.com
· 5d
Opinion | America’s Rare-Earths Solution Is Hiding in Plain Sight
www.nytimes.com
This @nytopinion.nytimes.com op-ed on rare earths repeats a misleading story: that China dominates these industries mainly because of lax labor and environmental standards. It sounds intuitive, but it’s analytically wrong in ways that matter for policy. 1/
www.nytimes.com/2026/02/06/o...
www.nytimes.com/2026/02/06/o...
Jonas Nahm
@jonasnahm.com
· 6d
Interesting counter-narrative to dominant story. Markets often get the direction right but can badly misjudge magnitude and timing. Worth listening if you are tracking industrial policy / energy transition. 9/9
Jonas Nahm
@jonasnahm.com
· 6d
The temporal mismatch cuts both ways - lots of generation coming online in next few years (solar), while bulk of data center demand weighted toward end of decade. 8/
Jonas Nahm
@jonasnahm.com
· 6d
Hardest part remains timing. Even if oversupply materializes, it's likely a 2030+ problem as demand ramps slower than build-out. Near-term dynamics are different: expiring IRA solar credits are pushing deployment now, potentially creating temporary surplus before data center demand ramps. 7/
Jonas Nahm
@jonasnahm.com
· 6d
None of this means AI isn't a major technological shift or that data center growth won't be substantial. But we've seen this pattern before - transformative technology + investment boom + temporal mismatch. Railroads, internet bubble, clean tech 1.0. 6/
Jonas Nahm
@jonasnahm.com
· 6d
If demand undershoots and we overbuild, who bears the stranded asset risk? Either utility shareholders or residential ratepayers. Political economy of subsidizing Big Tech infrastructure through consumer electricity bills is...complicated. 5/
Jonas Nahm
@jonasnahm.com
· 6d
Forward markets aren't reflecting this explosive demand either. Texas power curves barely moving despite forecasts of 30 GW additions to an 87 GW peak market. Natural gas futures are inverted - declining through end of decade. Markets pricing in a very different scenario. 4/
Jonas Nahm
@jonasnahm.com
· 6d
Demand forecasts suggest data centers need ~50 GW of new capacity by 2030 (moving from 45 GW today to 95 GW). But utilities have firm commitments for ~110 GW already in the pipeline. That's 2x what third-party estimates say we'll need. 3/
Jonas Nahm
@jonasnahm.com
· 6d
The consensus view: AI requires massive power buildout, data centers are the new growth driver, utilities shifting from sleepy dividend plays to secular growth story. But the supply-demand math tells a different story. 2/
Jonas Nahm
@jonasnahm.com
· 6d
The Utilities Analyst Who Says the Data Center Demand Story Doesn't Add Up
Utilities may be building twice as much power as needed.
www.bloomberg.com
Listened to this Oddlots episode with utilities analyst Andy DeVries this morning. Some useful pushback on the data center/AI power demand narrative that's worth working through. 1/
www.bloomberg.com/news/article...
www.bloomberg.com/news/article...
Jonas Nahm
@jonasnahm.com
· 6d
The piece's core insight holds: you can't have tariffs (weak dollar), Wall Street dominance (strong dollar), and financial deregulation (instability) all at once. Eight months later, still no resolution—just repeated retreats when bond markets spike.