Some thoughts on Harris’ Economic Plans

Note: This piece was slightly updated after first publishing to incorporate more details on the planned critical mineral stockpile and other steps to address these supply chain vulnerabilities which were mentioned in the speech and accompanying press release.

The Harris Walz campaign released a more detailed note on planned economic policy initiatives today accompanying a major economic and manufacturing focused speech delivered by the Vice President. The report is designed to respond to critiques that there wasn’t enough policy detail (although the other side has been even less detailed and had more time to prepared) and to take the chance to summarize the economic analysts who tend to prefer Harris plans to Trump (especially on the tariff and fiscal concerns). This post summarizes a few quick thoughts on the policy note especially from the energy, infrastructure, trade and manufacturing perspective.

The report lists 13 areas – economic initiatives – they think will boost the middle class, surveying what the Biden Harris admin has done, what is to be done and a dollop of how they differ from the Trump plans. Most of them cover domestic issues including drug price cuts, price gouging and local regulation cuts, but two of them seem particularly important from an energy/infrastructure and manufacturing perspective. Overall, Harris team has singled out some key priorities that continue on and redouble many Biden admin goals. There are of course plenty of implementation questions. 

What’s there? 

• Pledges to expand policies supporting advanced manufacturing both in technology and clean tech as well as other key industries like shipbuilding. A new program “America Forward” will use tax credits to develop select industries, aiming to crowd in private investment in sectors that are strategic. Focus is on adding jobs, especially union ones, but also lots of focus on reversing some of China’s dominance.  Projects will, like other industrial policy projects, require labor and environmental targets. Those investing with unions and in historical manufacturing, energy and farm areas may get more credits. There may need to be tradeoffs made especially given the range of top priorities, and the balance between price, competition and production goals.
• Investment in more basic and applied research in key strategic sectors, including quantum, blockchain, semi-conductors etc. Investing in new research capacities is a good thing especially if it also allows for some technology transfer to bring others along within and beyond the US.
• Support for energy industry broadly defined within the context of lowering energy prices further. The doc has perhaps one of the most full-throated examples of the new USG comfort with fossil fuel production and argument that they can support climate and cost goals together. Most of the “to dos” on energy side seemed focused on the power sector including the grid and interconnectivity. More detail will need to come on this. 
• Support for a stockpile of critical minerals and key inputs for manufacturing including a strategic reserve for metals. As with other key sectors the Defense production Act will be used to help leverage these developments. Details on how to fund it, which minerals and how to leverage are still to be determined, but many proponents have thought a lot about how best to create market shaping tools to help push back against Chinese dominance and thus ability to control prices and technologies in this space. This also was a rare space where US allies received a shout-out.
• Support for ‘clean steel” tho it remains to be seen whether those will align with EU and allied rules. 
• Support for permitting reform, which is needed for a wide range of infrastructure projects, mining and more. Details are scarce, but this is a good sign. 
• Many other ideas on cutting red tape, taxes and consumer costs (health care, grocery bills). 

What’s not there?

• Any references to areas where the US would work with allies on some of these key supply chains. Fair enough, it’s a campaign document about boosting the US economy and foreigners don’t vote. But still, it means that tradeoffs and priorities will need to be articulated elsewhere. Many foreign companies may take away the message invest in the US if you can and assume more local content regulations and “buy America” policies will proliferate. A Harris Walz admin might be as likely as the Biden Harris admin to urge allies to step up and use their policy space to “meet the moment” and encourage them to match US restrictions, such as the most recent restrictions on connected EV technology that Canada and Mexico will likely have to apply. That said, critical minerals remain a key area of collaboration and one where a Harris admin would likely extend partnerships to create new supply chains with trusted partners.
• Much detail on trade policy. There is a reference to the fact that Harris would protect US workers from unfair trade practices around the world, with presumably more targeted and not so targeted tariffs, but overall trade vision would probably be a post-election area or one discussed in a foreign policy memo or speech. I wrote last month about what Harris trade policy could look like and how it differs from Trump. Harris seems inclined to use trade protection tools in tandem with tax credits and other balance sheet support rather than instead of them. Thus tariffs, import restrictions and other tools, with some time to phase in and out will be part of a strategy, not just a negotiating tool or punishment. Still with the number of sectors now being prioritized, there could be quite a few export and import restrictions to navigate. 
• Details on how to fund the new critical mineral rollout and production. The accompanying press release and speech mentioned a critical mineral stockpile, an idea that has been gaining traction in response to recent price declines in critical minerals that have prompted some projects to be put on hold. The details about how this will be done and what pools of capital could be used to better financialize these markets are ahead. Note that this week at climate week, the Biden Harris admin rolled out planned expansions of financing with their Mineral security partners via export development agencies.
• Not much on crypto or digital assets, though blockchain did get a shout out in Harris’ Pittsburgh speech. Digital assets, CBDC and related infrastructure are an area where the US should make sure that other countries don’t set the rules, not least due to potential sanctions, AML and other dodgy activity evasion. 
• Discussion about labor shortages and sequencing of projects. Some of the industrial policies to date have already faced challenges with labor issues. More training collaboration and other efforts may be needed.

There are plenty of macro policies such as considerations about role of the dollar, sanctions implementation debt management etc that are beyond the scope of this report, but will be important to effectiveness of some of these goals and managing the divergent priorities. However, this report shows that Harris cares about signaling that she cares about the fiscal outlook and at least thinks about the debt dynamics. It remains to be seen if her opponent will release more detail on his economic and fiscal plans. Details on how he would bring oil prices down to $50-60/barrel and keep them there while also tightening sanctions implementation have yet to be revealed. Overall Harris’ extensive plan highlights how the policy toolkit has shifted with governments being willing to use a range of incentives and disincentives to address priorities supply chain issues. There will be plenty to assess on these plans to come.