Last week, Gov. Greg Abbott (R-Texas) returned from his economic development trip to Taiwan, Japan, and South Korea, where he “met with company executives, business leaders, foreign dignitaries, and government officials to promote Texas’ booming economy and drive progress in industries that are critical to the future of the global economy,” according to a press release from the Office of the Texas Governor.

Over the course of Gov. Abbott’s governorship, Texas has attracted billions of dollars in new investment into semiconductor manufacturing from Asian companies, creating thousands of high-paying jobs for Texans. GlobiTech, a subsidiary of Taiwan-based GlobalWafers Co., Ltd., is establishing a manufacturing plant in Sherman, Texas, that provides silicon epitaxy products to the semiconductor industry. Similarly, Samsung has set up shop for chip manufacturing in Austin, Texas, partly due to Gov. Abbott’s policies.

Gov. Abbott has provided a rough guideline of a successful 'America First' economic policy. If former President Trump wins the presidential election, it would be wise to implement an industrial policy that counterbalances the potential short-term price hikes that result from his proposed universal tariff.

During his trip, Gov. Abbott also stressed the importance of AI and space exploration and collaborating with East Asian countries since “the winners of the AI race will be winners of the world.” Abbott also announced the creation of a State of Texas office in Taipei, Taiwan, a new Samsung steel manufacturing plant in central Texas, emphasizing the necessity to forge economic relationships with key allies, restore manufacturing in vital sectors, and reduce overreliance on China.

“This mission helped strengthen our economic and cultural partnerships with Taiwan, South Korea, and Japan,” said Governor Abbott in the press release. “As Texas looks toward the future, it’s crucial that we continue to provide leading businesses from around the world with the opportunities to thrive and succeed in our great state. By visiting with business and government leaders in Taiwan, South Korea, and Japan, our ongoing collaboration in emerging industries will grow stronger for years to come. Working with our global partners across the Pacific, we will forge the future of innovation.”

A new conservative economics

American political leaders have always been keen on meeting with foreign leaders to bolster economic activity. However, Gov. Abbott’s recent Asia trip and his expressed willingness to form coalitions to revitalize domestic manufacturing are among the many markers of a new economic policy forming on the center-right.

Like traditional neoclassical economics, this new conservative economics focuses on supply, promotes free markets and deregulation, and encourages trade. However, its nationalism and pragmatism open it to a more interventionist industrial policy, advocating for investment in research and development and subsidies for key manufacturing sectors, which are vital for American economic and national security interests.

David P. Goldman, deputy editor of Asia Times and Washington fellow at the Claremont Institute’s Center for the American Way of Life, told Blaze Media that he believes “semiconductors are the most critical of industries, because all modern economic activity depends on them.”

“There is a very strong case for domestic production under secure conditions of chips used by the military or critical infrastructure. In that respect, the CHIPS Act addressed an urgent need. It did not address it especially well, however,” Goldman said. “Lack of skilled labor and infrastructure led to long delays in TSMC's and Samsung's plans to build chip fabrication plants in the US, and the price index for new industrial plant construction rose by nearly 30% in response to new investment supported by the CHIPS Act. Our allies Japan, South Korea and Taiwan can only do so much; we urgently need to train skilled labor and technicians and upgrade our infrastructure. The states can play the key role in training through their university systems.”

As America faces the looming threat of China and the supply-chain consequences, he and many others have put aside the standard neoliberal economic orthodoxy and embraced a new conservative economics.

Less than a year after Congress passed the CHIPS Act, Gov. Abbott signed the Texas CHIPS act, “establishing the Texas Semiconductor Innovation Consortium (TSIC) and the Texas Semiconductor Innovation Fund (TSIF) … [that] leverage[s] Texas’ investments in the semiconductor industry, encourage semiconductor-related companies to expand in the state, further develop the expertise and capacity of Texas institutions of higher education, and maintain the state’s position as the nation’s leader in semiconductor manufacturing,” according to Texas Economic Development & Tourism.

When the legislation was proposed, Gov. Abbott called it “a national competition to design and build the future of semiconductors.” He continued and said, “it is a race that Texas must win for our state, our workforce, our national security, and our future. With this legislation, Texas will not only remain number one in America for semiconductors — we will be number one in the world.”

Since then, Texas has become one of the primary hubs for chip manufacturing. Gov. Abbott has provided a rough guideline of a successful "America First" economic policy. If former President Trump wins the presidential election, it would be wise to implement an industrial policy that counterbalances the potential short-term price hikes that result from his proposed universal tariff. However, Trump’s global tariff would help rebalance America’s critical trade deficit. It may even be deflationary, and with policies that help fund capital-intensive projects vital to American interests, we could see long-term benefits for American industry.

The new right’s economic policy shows the eminence of economic security and independence from China. The trip highlighted the imperative that if America wants to regain the economic dominance it once had, America must be number one in semiconductor manufacturing, and adopting a robust industrial policy might just put us a significant step closer.