Raimondo on How European Industry Is Getting Crushed | Odd Lots

Why It Matters

A weakened European industry erodes collective security and hampers the West’s ability to counter China’s rise; US policy on chips and AI will determine the future balance of economic power.

Key Takeaways

• Chinese imports up 20‑30% year‑to‑date in Europe
• German industrial base facing crushing competition
• CHIPS Act aims 20% global leading‑edge capacity by 2030
• AI could cause mass unemployment, threaten democracy
• US‑Europe alliance essential for supply‑chain security

Pulse Analysis

Europe’s manufacturing decline is more than an economic story; it is a strategic vulnerability. Raimondo pointed to a 20‑30% jump in Chinese imports, which undercuts German auto and chemical giants and erodes the continent’s export‑driven growth model. The resulting hollowing‑out of critical sectors reduces Europe’s fiscal resilience and limits its capacity to shoulder defense spending, thereby straining NATO cohesion at a time when Beijing’s geopolitical ambitions are intensifying.

The CHIPS Act, a bipartisan cornerstone of U.S. industrial policy, illustrates how targeted subsidies can rebuild domestic capability. By 2030 the United States aims to capture roughly one‑fifth of the world’s leading‑edge semiconductor output, a milestone already visible with TSMC’s Arizona fab. Yet the act’s success hinges on securing the full supply chain—materials, packaging, and substrates—that remain dominated by Chinese firms. Diversifying these inputs through partnerships with Europe, Japan, and emerging markets is essential to prevent a new dependency cycle.

Raimondo’s warning about AI reflects a broader concern that rapid automation could displace millions, fueling social unrest and threatening democratic norms. She advocates a policy mix of transition incentives, entrepreneurial safety nets, and upskilling programs to cushion workers while fostering new industries. Coordinated US‑Europe action on AI governance, research funding, and labor safeguards can turn the technology race into a growth engine rather than a source of instability, reinforcing the shared democratic values that underpin the transatlantic alliance.