U.S. President Donald Trump returned to office promising a full-scale manufacturing renaissance in America. But the administration’s approach—defined by flashy deals, deep budget cuts, and chaotic trade policy—is actively undermining the foundations of U.S. long-term competitiveness.
Yes, there are promising headlines. Texas Instruments is spending $60 billion on fabs in Texas and Utah, Nvidia projects $500 billion in U.S.-built AI server output, and TSMC has pledged $165 billion for new chip plants in Arizona.
But while the money is beginning to flow, recent moves by the Trump administration threaten to hollow out the very innovation ecosystem that is essential to future success. Competing with China requires more than just ribbon cuttings and export controls. It demands investing in the fundamentals of American technological leadership: cutting-edge research, skilled talent, and confident capital. And on each front, the administration is going in the wrong direction.
America’s innovation edge starts with upstream scientific research—the breakthroughs that power new products and industries. But that pipeline is drying up. In the 1960s, Washington spent nearly 2 percent of GDP on civilian R&D—today, it’s just around 0.6 percent. Trump’s budget proposal would make that worse, slashing tens of billions from science agencies, including a 56 percent cut to the National Science Foundation and deep reductions to the National Institutes of Health and NASA. All in all, the Trump administration’s budget would slash basic science research by over one-third and mark the lowest level of science spending in this century. Instead of strengthening the public science engine that helped create the internet and launch the semiconductor industry, the administration is actively dismantling it.
Innovation needs builders, and America is running short. The United States has long been a talent magnet for the best and brightest from around the world. In fact, more than half of the United States’ billion-dollar start-ups were founded by immigrants. But the administration has moved to cut off the flow of foreign students to our best universities and limit visas available to STEM talent who want to stay in the U.S. and contribute. These measures signal to the world’s best minds: You are not welcome here. And other countries, from Canada to China, are taking advantage to welcome this top talent.
Meanwhile, there is no serious plan to train the workers we do have. The U.S. chip sector expects to be 67,000 workers short by 2030. Nor do we have enough electricians and other trades to modernize the electrical grid that industrial growth depends on. The solution is a re-skilling surge on the scale of the GI Bill: federal incentives for technical degrees, paid apprenticeships to give American workers the skills they need in high-tech factories, and debt-free pathways for American students in engineering and applied science.
Capital is the final gatekeeper. A cutting-edge chip fab costs over $20 billion to build and can take a decade to break even. But investors are being asked to commit in an environment of extreme economic uncertainty. In just six months, the administration has reversed course on sweeping tariffs, moved to renegotiate signed CHIPS Act agreements, and sent mixed signals on export controls. This level of economic uncertainty is undermining private-sector investment, as companies large and small hedge by delaying investment decisions in order to keep cash on their balance sheets.
To unlock long-term private-sector investment, the Trump administration needs to provide clarity. That means shielding strategic sectors from tariff whiplash, locking in CHIPS Act incentives through 2035, and offering a predictable road map for tech-related export controls. Without that predictability, even America’s deep capital markets won’t fund the innovation ecosystem we need to compete against China and globally.
Building an innovation ecosystem isn’t just about what to fund—it’s also about what to restrict. That’s where export controls come in. Used narrowly, export controls have helped blunt competitors’ access to frontier technologies. But they are a tool, not a strategy. Applied too broadly or imprecisely, export controls risk stalling the very innovation ecosystem we need to scale. The administration’s increasingly unilateral approach—imposing controls without coordinating with allies—has already strained trans-Atlantic trust. European leaders are now actively exploring how to reduce dependence on U.S. technology. Fragmenting the democratic tech ecosystem plays directly into Beijing’s hands.
America still has the strongest innovation ecosystem in the world—and the best chance to lead in the AI era. It has the research institutions, the engineering talent, the capital markets, and the network of allies to do it. But advantage doesn’t self-execute.
The Trump administration’s approach has exposed what happens when the country neglects the foundations of U.S. competitiveness. It’s time to lay out what real leadership requires instead: robust investment in science, a workforce policy that attracts and trains top talent, and stable rules to unlock long-term capital. The country that learns fastest, builds fastest, and scales fastest will shape the future. If the United States wants to be that country, it needs to stop dismantling the foundation—and start rebuilding it.