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Rational industrial policy requires detailed mapping of supply chains to identify critical upstream suppliers.
  • By analyzing tax returns, customs data, and supplier relationships, a government can pinpoint which foreign components are essential.
  • Once identified, the state can incentivize domestic production of those critical parts, reducing dependence on hostile suppliers.
  • This approach is far more precise than blanket tariffs, targeting the true bottlenecks in the supply chain.
  • It also enables coordinated investment, workforce training, and technology transfer for the identified sectors.
  • Balaji cites examples where such mapping could have prevented supply‑chain shocks during the pandemic.
Balaji SrinivasanThe Peter McCormack Show00:24:24

Supporting quotes

“Rational industrial policy would map supply chain, identify critical suppliers.” — Balaji Srinivasan
“Crowdfunding domestic vendors among foreign customers.” — Balaji Srinivasan

From this concept

Tariffs and Industrial Policy Are Ineffective Without Supply-Chain Insight

Balaji critiques tariffs as blunt, instant taxes that destroy margins, and proposes data-driven industrial policy that maps supply chains to build domestic capacity.

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