US manufacturers see big boost from government subsidies and tax breaks

The two Ohio factories – niche truck maker Battle Motors and global giant Intel Corp (INTC.O) – show a new readiness by US President Joe Biden's administration to offer subsidies and other incentives to strategic industries such as electric vehicles and semiconductors in a coordinated effort to help American businesses compete in a global economy.

Tesla Inc (TSLA.O) said Wednesday it would shift some vehicle battery production from Germany to the United States.

While the Biden administration push, described by economists as an industrial policy, has opened opportunities for some companies, significant hurdles remain.

Reuters toured both Ohio sites and spoke to over a dozen outside experts and political leaders about those challenges, which include potential worker shortages and a growing backlash from foreign governments rushing to boost competing companies.

Once criticized by conservatives as "picking winners and losers" and by progressives as corporate welfare, a US industrial policy is enjoying a rare bipartisan consensus, even in staunchly Republican states like Ohio.

Projects like Intel are a chance to "hit the reset button" on the US approach to fostering key industries, said Jon Husted, Ohio's Republican lieutenant governor, speaking as earth movers rumbled behind him at Intel's 1,000-acre site.

REUTERS