Glossary

Neo-mercantilism

A new version of an old idea: that a country should run trade surpluses, build its own factories in important sectors, and back national champion firms. The updated version is shaped for global supply chains and high-tech rivalry. Dani Rodrik, in a series of papers from 2020 onwards, argues that the post-2008 retreat from hyperglobalisation has produced a new policy menu that includes explicit industrial policy, sectoral subsidies, local-content rules, public investment in research and development, and screening of foreign investment for security risk. Visible indicators include the US CHIPS Act and Inflation Reduction Act, the EU Chips Act and Green Deal Industrial Plan, Japan's Rapidus consortium, China's *Made in China 2025* and dual-circulation doctrine, and the post-2022 critical-minerals scrambles in Australia, Canada, and Indonesia. Rodrik separates 'productivist' industrial policy — investing in capabilities and good jobs — from 'mercantilist' policy aimed at trade surpluses or beggar-thy-neighbour gains. In practice, current policies blend the two. The CHIPS Act mid-term audit and the industrial-policy reshoring analyses on this site walk through which side of that line specific programmes sit on.