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    G7 Countries Borrow China’s Economic Strategy

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    Wealthy democracies rev up an effort to spend trillions on a new climate-friendly energy economy, while stealing away some of China’s manufacturing power.Midway through his face-to-face meeting with President Biden in Indonesia last fall, the Chinese leader, Xi Jinping, offered an unsolicited warning.Mr. Biden had in the preceding months signed a series of laws aimed at supercharging America’s industrial capacity and imposed new limits on the export of technology to China, in hopes of dominating the race for advanced energy technologies that could help fight climate change. For months, he and his aides had worked to recruit allied countries to impose their own restrictions on sending technology to China.The effort echoed the sort of industrial policy that China had employed to become the world’s manufacturing leader. In Bali, Mr. Xi urged Mr. Biden to abandon it.The president was not persuaded. Mr. Xi’s protests only further convinced Mr. Biden that America’s new industrial approach was the right one, according to a person familiar with the exchange.As Mr. Biden and fellow leaders of the Group of 7 nations meet this weekend in Hiroshima, Japan, a centerpiece of their discussions will be how to rapidly accelerate what has become an internationally coordinated round of vast public investment. For these wealthy democracies, the goal is both to reduce their reliance on Chinese manufacturing and to help their own companies compete in a new energy economy.Mr. Biden’s legislative agenda, including bills focused on semiconductors, infrastructure and low-emission energy sources, has begun to spur what could be trillions of dollars in government and private investment in American industrial capacity. That includes subsidies for electric vehicles, batteries, wind farms, solar plants and much more.The spending — the United States’ most significant intervention in industrial policy in decades — has galvanized many of America’s top allies in Europe and Asia, including key leaders of the Group of 7. European nations, South Korea, Japan, Canada and others are pushing for increased access to America’s clean-energy subsidies, while launching companion efforts of their own.“This clean-tech race is an opportunity to go faster and further, together,” Ursula von der Leyen, the president of the European Commission, said after an economy-themed meeting at the Group of 7 summit on Friday.“Now that the G7 are in this race together, our competition should create additional manufacturing capacity and not come at each other’s expense,” she said.Mr. Biden touring a semiconductor manufacturer in Durham, N.C., in March.Al Drago for The New York TimesMr. Biden and his Group of 7 counterparts have embarked on a project with two ambitious goals: to accelerate demand, even by decades, for the technologies needed to reduce emissions and fight climate change, and to give workers in the United States and in allied countries an advantage over Chinese workers in meeting that demand.Much of that project has roared to life since the G7 leaders met last year in the German Alps. The wave of recent Group of 7 actions on supply chains, semiconductors and other measures to counter China is based on “economic security, national security and energy security,” Rahm Emanuel, the U.S. ambassador to Japan, told reporters this week in Tokyo.He added: “This is an inflection point for a new and more relevant G7.”Mr. Emanuel said the effort reflected a growing impatience among Group of 7 leaders with what they call Beijing’s use of economic measures to punish and deter behavior by foreign governments and companies that China’s officials do not like.But more than anything, the shift has been fueled by urgency over climate action and by two laws Mr. Biden signed last summer: a bipartisan bill to shower the semiconductor industry with tens of billions of dollars in government subsidies, and the climate provisions of the so-called Inflation Reduction Act, which companies have jumped to cash in on.Those bills have spurred a wave of newly announced battery plants, solar panel factories and other projects. They have also set off an international subsidy race, which has evolved after being deeply contentious in the immediate aftermath of the signing of the climate law.The lucrative U.S. supports for clean energy and semiconductors — along with stricter requirements for companies and government agencies to buy U.S.-made steel, vehicles and equipment — have put unwelcome pressure on competing industries in allied countries.Workers at a solar energy parts and batteries factory in Suqian, China, in February.Alex Plavevski/EPA, via ShutterstockSome of those concerns have been quelled in recent months. The United States signed a deal with Japan in March that will allow battery materials made in Japan to qualify for the benefits of the Inflation Reduction Act. The European Union is pursuing a similar agreement, and has proposed its own $270 billion program to subsidize green industries. Canada has passed its own version of the Biden climate law, and Britain, Indonesia and other countries are angling for their own critical mineral deals.Administration officials say once-rankled allies have bought into the potential benefits of a concerted wealthy-democracy industrial strategy.At the Group of 7 meeting, “you will see a degree of convergence on this that, from our perspective, can continue the conversion of the Inflation Reduction Act from a source of friction into a source of cooperation and strength between the United States and our G7 partners,” Jake Sullivan, the national security adviser, told reporters on Air Force One as Mr. Biden flew to Japan.Some Group of 7 officials say the alliance has much more work to do to ensure that fast-growing economies like India benefit from the increased investments in a new energy economy. “It is important that the acceleration that is going to be created by this doesn’t disincentivize investment around the world,” Kirsten Hillman, the Canadian ambassador to the United States, said in an interview.One country they don’t want to see benefit is China. The United States has issued sweeping restrictions on China’s ability to access American technology, namely advanced chips and the machinery used to make them. And it has leaned on its allies as it tries to enforce global restrictions on sharing technology with Russia, as well as China. All of those efforts are meant to hinder China’s continued development in advanced manufacturing.Biden officials have urged allied countries not to step in to supply China with chips and other products it can no longer get from the United States. The United States is also weighing further restrictions on certain kinds of Chinese chip technology, including a likely ban on venture capital investments that U.S. officials are expected to discuss with their counterparts in Hiroshima.Although many of the Group of 7 governments agree that China poses an increasing economic and security threat, there is little consensus about what to do about it.Mr. Biden with Xi Jinping, China’s leader, in Bali, Indonesia, in November.Doug Mills/The New York TimesJapanese officials have been relatively eager to discuss coordinated responses to economic coercion from China, following Beijing’s move to cut Japan off from a supply of rare earth minerals during a clash more than a decade ago.European officials, by contrast, have been more divided on whether to risk close and lucrative business ties with China. Some, like the French president, Emmanuel Macron, have pushed back on U.S. plans to decouple supply chains with China.Ms. von der Leyen, the European Commission president, has been pushing for a “de-risking” of relations with China that involves recognizing China’s growing economic and security ambitions while reducing, in targeted ways, European dependence on China for its industrial and defense base. European officials said in Hiroshima that they had been pleased to see American leaders moving more toward their approach, at least rhetorically.Still, the allies’ industrial policy push threatens to complicate already difficult relations with China. Consulting and advisory firms with foreign ties have been subject to raids, detainments and arrests in China in recent months. Chinese officials have made clear that they see export controls as a threat. Adopting the phase American officials use to criticize Beijing, the Chinese Embassy in Washington warned the Group of 7 this week against what it called “economic coercion.”Mr. Xi issued a similar rebuke to Mr. Biden in Bali last fall. He pointed to the late 1950s, when the Soviet Union withdrew support for the Chinese nuclear program.China’s nuclear research continued, Mr. Xi said, and four years later, it detonated its first atomic bomb. More

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    Russia Is Importing Western Weapons Technology, Bypassing Sanctions

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    Western technology goods are winding up in Russian missiles, raising questions about the efficacy of sanctions.Late last month, American and European Union officials traded information on millions of dollars’ worth of banned technology that was slipping through the cracks of their defenses and into Russian territory.Senior tax and trade officials noted a surge in chips and other electronic components being sold to Russia through Armenia, Kazakhstan and other countries, according to slides from the March 24 meeting obtained by The New York Times. And they shared information on the flow of eight particularly sensitive categories of chips and other electronic devices that they have deemed as critical to the development of weapons, including Russian cruise missiles that have struck Ukraine.As Ukraine tries to repel Russia from its territory, the United States and its allies have been fighting a parallel battle to keep the chips needed for weapons systems, drones and tanks out of Russian hands.But denying Russia access to chips has been a challenge, and the United States and Europe have not made a clear victory. While Russia’s ability to manufacture weaponry has been diminished because of Western sanctions adopted more than a year ago, the country is still gaining circuitous access to many electronic components.The result is devastating: As the United States and the European Union rally to furnish Ukrainians with weapons to keep fighting against Russia, their own technology is being used by Russia to fight back.American officials argue that the sweeping sanctions they have imposed in partnership with 38 other governments have severely damaged Russia’s military capacity, and raised the cost to Russia to procure the parts it needs.“My view is that we’ve been very effective in impeding Russia’s ability to sustain and reconstitute a military force,” said Alan Estevez, who oversees U.S. export controls at the Bureau of Industry and Security at the Commerce Department, in an interview in March.“We recognize that this is hard, hard work,” Mr. Estevez added. “They’re adapting. We’re adapting to their adaptations.”There is no doubt that the trade restrictions are making it significantly harder for Russia to obtain technology that can be used on the battlefield, much of which is designed by firms in the United States and allied countries.Direct sales of chips to Russia from the United States and its allies have plummeted to zero. U.S. officials say Russia has already blown through much of its supply of its most accurate weapons and has been forced to substitute lower-quality or counterfeit parts that make its weaponry less accurate.But trade data shows that other countries have stepped in to provide Russia with some of what it needs. After dropping off sharply immediately after the Ukrainian invasion, Russia’s chip imports crept back up, particularly from China. Imports between October and January were 50 percent or more of median prewar levels each month, according to tracking by Silverado Policy Accelerator, a think tank.Sarah V. Stewart, Silverado’s chief executive, said the export controls imposed on Russia had disrupted pre-existing supply chains, calling that “a really positive thing.” But she said Russia was “still continuing to get quite a substantial amount” of chips.“It’s really a supply chain network that is very, very large and very complex and not necessarily transparent,” Ms. Stewart said. “Chips are truly ubiquitous.”A Ukrainian serviceman holding an electronic unit of an unmanned aerial vehicle used by Russia against Ukraine, during a media briefing of the Security and Defense Forces of Ukraine in Kyiv last week.STR/NurPhoto, via Getty ImagesAs Russia has tried to get around restrictions, U.S. officials have steadily ratcheted up their rules, including adding sanctions on dozens of companies and organizations in Russia, Iran, China, Canada and elsewhere. The United States has also expanded its trade restrictions to include toasters, hair dryers and microwaves, all of which contain chips, and set up a “disruptive technology strike force” to investigate and prosecute illicit actors trying to acquire sensitive technology.But the illicit trade in chips is proving hard to police given the ubiquity of semiconductors. Companies shipped 1.15 trillion chips to customers globally in 2021, adding to a huge worldwide stockpile. China, which is not part of the sanctions regime, is pumping out increasingly sophisticated chips.The Semiconductor Industry Association, which represents major chip companies, said that it was engaging with the U.S. government and other parties to combat the illicit trade in semiconductors, but that controlling their flow was extremely difficult.“We have rigorous protocols to remove bad actors from our supply chains, but with about one trillion chips sold globally each year, it’s not as simple as flipping a switch,” the association said in a statement.So far, the Russian military appears to have been relying on a large stockpile of electronics and weaponry it accumulated before the invasion. But that supply may be drying up, making it more urgent for Russia to obtain new shipments.A report issued Tuesday by Conflict Armament Research, an independent group that examines Russian weaponry recovered from the battlefield, revealed the first known example of Russia’s making weapons with chips manufactured after the invasion began.Three identical chips, made by a U.S. company in an offshore factory, were found in Lancet drones recovered from several sites in Ukraine this past February and March, according to Damien Spleeters, who led the investigation for C.A.R.Mr. Spleeters said his group was not revealing the chip’s manufacturer while it worked with the company to trace how the product ended up in Russia.These chips were not necessarily an example of an export control violation, Mr. Spleeters said, since the United States did not issue restrictions on this specific type of chip until September. The chips were manufactured in August and may have been shipped out soon thereafter, he said.But he saw their presence as evidence that Russia’s big prewar stockpile of electronics was finally running out. “Now we are going to start seeing whether controls and sanctions will be effective,” Mr. Spleeters said.The parent company of the firm that designed the drone, the Kalashnikov Group, a major Russian weapons manufacturer, has publicly challenged the West’s technology restrictions.“It is impossible to isolate Russia from the entire global electronic component base,” Alan Lushnikov, the group’s president, said in a Russian-language interview last year, according to a translation in a report from the Center for Strategic and International Studies, a think tank. “It’s a fantasy to think otherwise.”That quote included “some bluster,” Gregory Allen, one of the report’s authors, said at an event in December. But he added: “Russia is going to try and do whatever it takes to get around these export controls. Because for them, the stakes are incredibly, incredibly high.”As the documents from the March meeting show, U.S. and European officials have become increasingly concerned that Russia is obtaining American and European goods by rerouting them through Armenia, Kazakhstan and other Central Asian countries.One document marked with the seal of the U.S. Bureau of Industry and Security said that in 2022, Armenia imported 515 percent more chips and processors from the United States and 212 percent more from the European Union than in 2021. Armenia then exported 97 percent of those same products to Russia, the document said.In another document, the Bureau of Industry and Security identified eight categories of chips and components deemed critical to Russian weapons development, including one called a field programmable gate array, which had been found in one model of Russian cruise missile, the KH-101.The intelligence sharing between the United States and Europe is part of a nascent but intensifying effort to minimize the leakage of such items to Russia. While the United States has deeper experience with enforcing sanctions, the European Union lacks centralized intelligence, customs and law enforcement abilities.The United States and the European Union have both recently dispatched officials to countries that were shipping more to Russia, to try to cut down that trade. Mr. Estevez said a recent visit to Turkey had persuaded that government to halt transshipments to Russia through their free trade zone, as well the servicing of Russian and Belarusian airplanes in Turkish airports.Biden administration officials say shipments to Russia and Belarus of the electronic equipment they have targeted fell 41 percent between 2021 and 2022, as the United States and its allies expanded their restrictions globally.Matthew S. Axelrod, the assistant secretary for export enforcement at the Bureau of Industry and Security, said the picture was one of a “broad decrease.”“But still there are certain areas of the world that are being used to get these items to Russia,” he said. “That’s a problem that we are laser-focused on.”John Ismay More

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    Biden’s Reluctant Approach to Free Trade Draws Backlash

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    A law intended to bolster clean energy manufacturing has ignited debate over whether the U.S. should work to break down international trade barriers — or keep them intact to protect American workers.WASHINGTON — Since President Biden came into office two years ago, the United States has declined to pursue new comprehensive free-trade agreements with other countries, arguing that most Americans have turned against the kind of pacts that promote global commerce but that also help to send factory jobs overseas.But in recent months, with the rollout of a sweeping climate bill intended to bolster clean energy manufacturing, the lack of free-trade agreements with some of America’s closest allies has suddenly become a major headache for the administration.The dispute, which centers on which countries can receive benefits under the Inflation Reduction Act, has caused significant rifts with foreign governments and drawn blowback from Congress. And it is helping to reignite a debate over whether the United States should be working to break down trade barriers with other countries — or keep them intact in an attempt to protect American workers.The law as written offers tax credits for electric vehicles that are built in North America or that are made with battery minerals from the United States and countries with which it has a free-trade agreement.Those provisions have angered allies in Europe and elsewhere that, despite close ties with America, do not actually have free-trade agreements with the United States. They have complained that companies in their countries would be put at a disadvantage to U.S. firms that can receive the subsidies. To soothe relations, the Biden administration has developed a complicated workaround, in which it is signing limited new trade deals with Japan and the European Union.But that solution has vexed lawmakers of both parties, who say that these agreements are not valid and that the administration needs to ask Congress to approve the kind of free-trade agreement the law envisions.“It’s a fix,” said Edward Alden, a senior fellow at the Council on Foreign Relations who specializes in trade, adding that they were not free-trade agreements “by any reasonable definition of the term.”The World Trade Organization defines a free-trade agreement as covering “substantially all trade” between countries. In the United States, such broad agreements need the approval of Congress, though the executive branch has the authority to negotiate much narrower agreements.Administration officials argue that because the Inflation Reduction Act does not define the term “free-trade agreement,” these narrower pacts are allowed. But in hearings before the House and the Senate last month, lawmakers criticized the administration for bypassing Congress in making these agreements.Some lawmakers argued for more traditional free-trade deals, while others voiced support for new deals with higher labor and environmental standards, like the North American agreement Congress approved in 2020.In hearings, Katherine Tai, the U.S. trade representative, highlighted efforts to raise global labor standards and decarbonize industries, and said she and her colleagues were “writing a new story on trade.”Mariam Zuhaib/Associated PressIn her opening statement at the hearings, Katherine Tai, the United States trade representative, set out a vision for a trade policy that was different from those of previous administrations, focused more on defending American workers from unfair foreign competition than opening up global markets. Ms. Tai said she and her colleagues were “writing a new story on trade” that would put working families first and reflect the interests of a wider cross section of Americans.Speaking before the Senate on Thursday, Ms. Tai said she remained “open minded” about doing more trade agreements if they would help address the challenges the country has today.The Biden administration has long insisted that past approaches to trade policy — in which other countries gained access to the U.S. market through low or zero tariffs — ended up hurting American workers and enriching multinational companies, which simply moved U.S. jobs and factories overseas. In contrast, Biden officials have pledged to strengthen the economy and to make the country more competitive with China by expanding the country’s infrastructure and manufacturing, rather than negotiating new trade deals.The administration is currently negotiating trade frameworks for the Indo-Pacific region and the Americas, and is engaging in trade talks with Taiwan, Kenya and other governments. But, to the dissatisfaction of some lawmakers in both parties, none of these agreements are expected to involve significantly opening up foreign markets by lowering tariffs, as more traditional trade deals have done..css-1v2n82w{max-width:600px;width:calc(100% – 40px);margin-top:20px;margin-bottom:25px;height:auto;margin-left:auto;margin-right:auto;font-family:nyt-franklin;color:var(–color-content-secondary,#363636);}@media only screen and (max-width:480px){.css-1v2n82w{margin-left:20px;margin-right:20px;}}@media only screen and (min-width:1024px){.css-1v2n82w{width:600px;}}.css-161d8zr{width:40px;margin-bottom:18px;text-align:left;margin-left:0;color:var(–color-content-primary,#121212);border:1px solid var(–color-content-primary,#121212);}@media only screen and (max-width:480px){.css-161d8zr{width:30px;margin-bottom:15px;}}.css-tjtq43{line-height:25px;}@media only screen and (max-width:480px){.css-tjtq43{line-height:24px;}}.css-x1k33h{font-family:nyt-cheltenham;font-size:19px;font-weight:700;line-height:25px;}.css-1hvpcve{font-size:17px;font-weight:300;line-height:25px;}.css-1hvpcve em{font-style:italic;}.css-1hvpcve strong{font-weight:bold;}.css-1hvpcve a{font-weight:500;color:var(–color-content-secondary,#363636);}.css-1c013uz{margin-top:18px;margin-bottom:22px;}@media only screen and (max-width:480px){.css-1c013uz{font-size:14px;margin-top:15px;margin-bottom:20px;}}.css-1c013uz a{color:var(–color-signal-editorial,#326891);-webkit-text-decoration:underline;text-decoration:underline;font-weight:500;font-size:16px;}@media only screen and (max-width:480px){.css-1c013uz a{font-size:13px;}}.css-1c013uz a:hover{-webkit-text-decoration:none;text-decoration:none;}How Times reporters cover politics. We rely on our journalists to be independent observers. So while Times staff members may vote, they are not allowed to endorse or campaign for candidates or political causes. This includes participating in marches or rallies in support of a movement or giving money to, or raising money for, any political candidate or election cause.Learn more about our process.Representative Adrian Smith, a Nebraska Republican who leads the House Ways and Means trade subcommittee, said in the hearing that he was concerned the United States had “lost momentum on trade” even as China continued to aggressively broaden its own partnerships.“I cannot express strongly enough,” he added, “that the administration cannot just come up with new definitions of what a trade agreement is for some reason, and certainly not to give handouts for electric vehicles.”“You have to appreciate that we live in a very different world,” Ms. Tai responded. She said the Biden administration sought to adapt its policies to respond “to the world we’re living in, and not the world that we want to live in.”Part of the pressure stems from the fact that other countries — including China — are continuing to pursue more traditional trade deals that lower their tariffs with trading partners, giving their companies an advantage over businesses based elsewhere. On Friday, British officials announced that they had reached an agreement to join a Pacific trade pact that, despite being devised by the Obama administration, does not include the United States.Membership in the so-called Comprehensive and Progressive Agreement for Trans-Pacific Partnership will allow Britain to export products tariff-free to 11 other countries. With the inclusion of Britain, the pact will represent 15 percent of the global economy, British officials said.Jake Colvin, the president of the National Foreign Trade Council, a U.S. group that lobbies on behalf of major multinational companies, called the news “a stark reminder that the world isn’t waiting for the United States.”“While we congratulate the U.K. government for being part of this massive agreement, it’s frustrating to see America’s allies writing global rules and creating new market opportunities without the United States,” he said.Politicians of both parties have found support for free-trade agreements to be controversial in the United States in recent years. The Trans-Pacific Partnership — the original deal negotiated by the Obama administration with 11 other nations circling the Pacific Ocean — received criticism from labor unions and other progressive Democrats who said it would ship jobs overseas. Hillary Clinton opposed it as a candidate in the 2016 presidential election.As president, Donald J. Trump also criticized the deal and officially withdrew the United States from it in 2017. He also scrapped a negotiation over a comprehensive trade deal the Obama administration had been carrying out with the European Union.The Biden administration is trying to reach trade frameworks for the Indo-Pacific region and the Americas, but none of these agreements are expected to involve significantly opening up foreign markets by lowering tariffs.Coley Brown for The New York TimesMr. Trump went on to sign a series of limited trade deals with Japan and China without congressional approval. He also oversaw an update to the North American Free Trade Agreement that was ratified by Congress, which he named the U.S.-Mexico-Canada Agreement.Democrats also came to support that deal after adding significant protections for workers and the environment.Some trade experts have speculated that the Biden administration will try to build on the success of the U.S.M.C.A. by adding more nations to the pact, or by applying its terms to negotiations elsewhere. But so far, the Biden administration has not announced any such plans.Two top Democratic lawmakers focused on trade issued a statement last week criticizing the limited agreement the Biden administration had signed with Japan and urging officials to try to replicate the success of the U.S.M.C.A. by working with Congress to draft new deals with enforceable environmental and labor protections.“U.S.M.C.A. is a prime example of what’s possible when the executive and Congress collaborate, and its enforcement mechanisms should be the floor for future agreements,” Representative Richard E. Neal of Massachusetts, the top Democrat on the Ways and Means Committee, and Senator Ron Wyden, a Democrat of Oregon who leads the Finance Committee, said in the statement.Republicans have also been split over how aggressively to pursue new free-trade agreements. More traditional free-traders — like those from agricultural states that depend on exporting goods overseas — have been at odds with a growing populist contingent that favors industrial policy and trade barriers to protect American workers.Still, Kelly Ann Shaw, a partner with Hogan Lovells in Washington and a former economic adviser to the Trump administration, said that “the amount of inaction by the administration is doing a lot to unify Republicans” around pursuing more free-trade deals.“If you would ask me two years ago, I would have thought that Republicans were more split on this issue than they really are,” she said. “But it’s pretty clear that we’re losing out on opportunities by sitting on our hands and doing nothing.” More

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    Do We Know How Many People Are Working From Home?

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    New Labor Department numbers indicate that fewer Americans worked remotely last year. But many experts criticize the government’s data collection.Millions of workers, employers, square feet of real estate and dollars of downtown economic retail are wrapped up in the question of how many people are working from home — yet there remain large discrepancies in how remote work is measured.The Labor Department, last week, released data indicating a decline in remote work: 72.5 percent of businesses said their employees rarely or never teleworked last year, up from 60.1 percent in 2021 and quite close to the 76.7 percent that had no such work before the pandemic. But while the Labor Department found that remote work was almost back to prepandemic levels, many other surveys show it is up four- to fivefold.Outside research, including a monthly survey of workers from researchers at Stanford University and the Census Bureau’s household survey, indicate that remote work remains prevalent, with Stanford’s finding that it accounts for over a quarter of paid full-time workdays in the United States, just slightly down from 33 percent in 2021. Some scholars suggested that the Labor Department’s survey may overcount fully in-person work, though the comparisons among the various surveys aren’t direct.“I see this survey as an outlier and not the most reliable measure,” said Adam Ozimek, chief economist of the Economic Innovation Group, a public policy organization, describing the Labor Department’s survey. “We need to think hard as we try to develop better measures of working from home.”Remote work is having profound effects on nearly every dimension of the economy: foot traffic to downtown businesses, housing markets in big cities and far-flung areas, methods of assessing productivity and child care. Public transportation ridership sank during the pandemic, and suburban real estate values rose.Nearly one billion square feet of office real estate was available but in search of a tenant at the end of 2022. People refashioned their lives and routines, working 28 percent more after traditional hours, according to Microsoft.The stakes of measuring remote work’s prevalence are high. And researchers said the wording of the Bureau of Labor Statistics survey on remote work, which was distributed to businesses, might have caused some confusion among respondents.“Telework is a work arrangement that allows an employee to work at home, or from another remote location, by using the internet or a computer linked to one’s place of employment, as well as digital communications, such as email and phone,” the survey read. “Do any employees at this location CURRENTLY telework in any amount?”By defining telework so broadly — as any worker sending an email or making a call outside the office — the Labor Department’s survey question should most likely have turned up a fully in-person figure lower than the one released last week, said Nick Bloom, an economist at Stanford, suggesting that some businesses may have been confused by the question.This particular Labor Department figure on telework also combines fully remote work with hybrid arrangements. But hybrid work has eclipsed fully remote policies, with just over half of the workers who can do their jobs from home combining in-person and remote work, according to Gallup.A spokeswoman for the Labor Department said the survey most likely did not reflect informal work-from-home arrangements.“Taking into account that the self-employed and the public sector are not included in the sample, and that this is a survey of establishments rather than individuals, our estimates do not appear out of line with other estimates,” the spokeswoman said.Stanford’s monthly study on working from home, which surveys 10,000 workers across cities and industries, found that 27 percent of paid full-time days were worked from home in early 2023.Much of that remote work came from hybrid setups. Last month, the survey found that 12 percent of workers were fully remote, roughly 60 percent fully in person and 28 percent hybrid.Other sources of data confirm that working-from-home patterns remain entrenched in certain industries. The building security firm Kastle, for example, tracks data on office badge swipes and reported this month that offices remained at roughly 48 percent of their prepandemic occupancy.A closer look at New York, from the Partnership for New York City, found that 52 percent of Manhattan office workers were working in person on an average day at the start of this year, up from 49 percent in September. But only 9 percent of employees were in the office five days a week, underscoring the reach of hybrid arrangements. And Square, the retail technology company, which tracks payments at food and drink establishments, found that sales growth at bars and restaurants in Brooklyn had recently outpaced growth of those in Manhattan.“It’s clear that the work-from-home trends induced by the pandemic have transformed the food and drink scene in the city,” said Ara Kharazian, an economist at Square.The Partnership for New York City’s data indicated that financial service firms were back in the office in greater numbers than many other companies. Financial service firms reported 59 percent daily office attendance in late January, according to the partnership. The tech industry, by contrast, was at 43 percent.All this data is emerging as hundreds of companies formalize their policies on hybrid work, with many trying to persuade their employees to spend more time at the office.Amazon told corporate workers last month that they had to be in the office three days a week starting in May, and Starbucks called its 3,750 corporate workers back three days a week as well. Disney asked employees to return to the office four days a week. Its chief executive, Robert A. Iger, cited the need for in-person creative collaborations.Other chief executives have also begun to question the merits of remote work. Even Marc Benioff, chief executive of Salesforce, which told all its employees that they could go permanently remote, began voicing concern this year that productivity among some employees has been lower.As executives clamp down on in-person work, worker resistance has become more vocal. At Amazon, more than 29,000 employees joined a Slack channel, called Remote Advocacy, protesting the shift to in-person work. At Starbucks, more than 40 corporate employees signed an open letter opposing the new return-to-office policy.Wherever people are doing the jobs they already have, mostly in person per the Labor Department or over a quarter of the time at home per others, one metric does indicate that hybrid work is here to stay: job postings.A study from researchers at Stanford, Harvard and other institutions analyzing over 50 million job postings last month found that postings explicitly mentioning remote work are at 12.2 percent — a fourfold increase since before the pandemic. More

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    Banks Are Borrowing More From the Fed: What to Know

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    As turmoil sweeps the United States financial system, banks are turning to the Federal Reserve for loans to get them through the squeeze.Banks are turning to the Federal Reserve’s loan programs to access funding as turmoil sweeps the financial system in the wake several high-profile bank failures.The collapse of Silicon Valley Bank on March 10 followed by Signature Bank on March 12 prompted depositors to pull their money from some banks and sent the stock prices for financial firms on a roller-coaster ride. The tumult has left some institutions looking for a ready source of cash — either to pay back customers or to make sure they have enough money on hand to weather a rough patch.That is where the Fed comes in. The central bank was founded in 1913 partly to serve as a backstop to the banking system — it can loan financial institutions money against their assets in a pinch, which can help banks raise cash more quickly than they would be able to if they had to sell those securities on the open market.But the Fed is now going further than that: Central bankers on March 12 created a program that is lending to banks against their financial assets as if those securities were still worth their original value. Why? As the Fed has raised interest rates to contain inflation over the past year, bonds and mortgage debt that paid lower rate of interest became less valuable.By lending against the assets at their original price instead of their lower market value, the Fed can insulate banks from having to sell those securities at big losses. That could reassure depositors and stave off bank runs.Two key programs together lent $163.9 billion this week, according to Fed data released on Wednesday — roughly in line with $164.8 billion a week earlier. That is much higher than normal. The report usually shows banks borrowing less than $10 billion at the Fed’s so-called “discount window” program.The elevated lending underlines a troubling reality: Stress continues to course through the banking system. The question is whether the government’s response, including a new central bank lending program, will be enough to quell it.A Little HistoryBefore diving into what the fresh figures mean, it’s important to understand how the Fed’s lending programs work.The first, and more traditional, is the discount window, affectionately called “disco” by financial wonks. It is the Fed’s original tool: At its founding, the central bank didn’t buy and sell securities as it does today, but it could lend to banks against collateral.In the modern era, though, borrowing from the discount window has been stigmatized. There is a perception in the financial industry that if a big bank taps it, it must be a sign of distress. Borrower identities are released, though it’s on a two-year delay. Its most frequent users are community banks, though some big regional lenders like Bancorp used it in 2020 at the onset of the pandemic. Fed officials have tweaked the program’s terms over the years to try to make it more attractive during times of trouble, but with mixed results.Enter the Fed’s new facility, which is like the discount window on steroids. Officially called the Bank Term Funding Program, it leverages emergency lending powers that the Fed has had since the Great Depression — ones that the central bank can use in “extraordinary and exigent” circumstances with the sign-off of the Treasury secretary. Through it, the Fed is lending against Treasuries and mortgage-backed securities valued at their original price for up to a year.Policymakers seem to hope that the program will help reduce interest rate risk in the banking system — the problem of the day — while also getting around the stigma of borrowing from the discount window.Banks are Borrowing More Than UsualThe backstops seem to be working:  During the recent turmoil, banks are using both programs.Discount window borrowing climbed to $110.2 billion as of Wednesday, down slightly from $152.9 billion the previous week — when the turmoil started. Those figures are abnormally elevated: Discount window borrowing had stood at just $4.6 billion the week before the tumult began.The new program also had borrowers. As of Wednesday, banks were borrowing $53.7 billion, according to the Fed data. The previous week, it stood at $11.9 billion. The names of specific borrowers will not be released until 2025.The Borrowing Could Be a Sign of TroubleThe next issue is perhaps more critical: Analysts are trying to parse whether it is a good thing that banks are turning to these programs, or whether the stepped up borrowing is a sign that their problems remain serious.“You still have some banks that feel the need to tap these facilities,” said Subadra Rajappa, head of U.S. rates strategy at Société Générale. “There’s definitely cash moving from the banking sector and into other investments, or into the biggest banks.”While Silicon Valley Bank had some obvious weaknesses that regulation experts said were not widely shared across the banking system, its failure has prodded people to look more closely at banks — and depositors have been punishing those with similarities to the failed institutions by withdrawing their cash. PacWest Bancorp has been among the struggling banks. The company said this week that it had borrowed $10.5 billion from the Fed’s discount window.Or the Borrowing Could Be a Good SignThe fact that banks feel comfortable using these tools might reassure depositors and financial markets that cash will keep flowing, which might help avert further troubles.In the past, borrowing from the Fed carried a stigma because it signaled a bank might be in trouble. This time around, the securities the banks hold aren’t at risk of defaulting, they are just worth less in the bond market as a result of the rapid increase in interest rates.“For me, this is a very different situation to what I have seen in the past,” said Greg Peters, co-chief investment officer at PGIM Fixed Income. More

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    Low Rates Were Meant to Last. Without Them, Finance Is In for a Rough Ride.

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    Economists expected inflation and rates to stay low for years. With Silicon Valley Bank’s implosion, Wall Street is starting to reckon with how wrong that prediction has proved.WASHINGTON — If a number defined the 2010s, it was 2 percent. Inflation, annual economic growth, and interest rates at their highest all hovered around that level — so persistently that economists, the Federal Reserve and Wall Street began to bet that the era of low-everything would last.That bet has gone bad. And with the implosion of Silicon Valley Bank, America is beginning to reckon with the consequences.Inflation surprised economists and policymakers by spiking after the onset of the coronavirus pandemic, and at 6 percent in February, it is proving difficult to stamp out. The Fed has lifted interest rates by 4.5 percentage points in just the past 12 months as it tries to slow the economy and wrestle price increases under control. The central bank’s decision next Wednesday could nudge rates even higher. And that jump in borrowing costs is catching some businesses, investors and households by surprise.Silicon Valley Bank is the most extreme example of an institution’s being caught off guard so far. The bank had amassed a big portfolio of long-term bonds, which pay more interest than shorter-term ones. But it wasn’t paying to sufficiently protect its assets against the possibility of an interest rate spike — and when rates jumped, it found the market value of its holdings seriously dented. The reason: Why would investors want those old bonds when they could buy new ones at more attractive rates?Those impending financial losses helped to spook investors, fueling a bank run that collapsed the institution and shot tremors across the American banking system.The bank’s mistake was a bad — and ultimately lethal — one. But it wasn’t wholly unique.Many banks are holding big portfolios of long-term bonds that are worth a lot less than their original value. U.S. banks were sitting on $620 billion in unrealized losses from securities that had dropped in price at the end of 2022, based on Federal Deposit Insurance Corporation data, with many regional banks facing big hits.Adding in other potential losses, including on mortgages that were extended when rates were low, economists at New York University have estimated that the total may be more like $1.75 trillion. Banks can offset that with higher earnings on deposits — but that doesn’t work if depositors pull their money out, as in Silicon Valley Bank’s case.“How worried should we be comes down to: How likely is it that the deposit franchise leaves?” said Alexi Savov, who wrote the analysis with his colleague Philipp Schnabl.Regulators are conscious of that potentially broad interest rate risk. The Fed unveiled an emergency loan program on Sunday night that will offer banks cash in exchange for their bonds, treating them as though they were still worth their original value in the process. The setup will allow banks to temporarily escape the squeeze they are feeling as interest rates rise.But even if the Fed succeeds at neutralizing the threat of bank runs tied to rising rates, it is likely that other vulnerabilities grew during decades of relatively low interest rates. That could trigger more problems at a time when borrowing costs are substantially higher.Impending financial losses helped to spook investors, fueling a bank run that collapsed Silicon Valley Bank and shot tremors across the U.S. banking system.Jason Henry for The New York Times“There’s an old saying: Whenever the Fed hits the brakes, someone goes through the windshield,” said Michael Feroli, chief economist at J.P. Morgan. “You just never know who it’s going to be.”America has gone through regular bouts of financial pain brought about by rising interest rates. A jump in rates has been blamed for helping to burst the bubble in technology stocks in the early 2000s, and for contributing to the decline in house prices that helped to set off the crash in 2008.Even more closely related to the current moment, a sharp rise in interest rates in the 1970s and 1980s caused acute problems in the savings and loan industry that ended only when the government intervened.There’s a simple logic behind the financial problems that arise from rising interest rates. When borrowing costs are very low, people and businesses need to take on more risk to earn money on their cash — and that typically means that they tie up their money for longer or they throw their cash behind risky ventures.When the Fed raises interest rates to cool the economy and control inflation, though, money moves toward the comparative safety of government bonds and other steady investments. They suddenly pay more, and they seem like a surer bet in a world where the central bank is trying to slow the economy.That helps to explain what is happening in the technology sector in 2023, for example. Investors have pulled back from tech company stocks, which tend to have values that are predicated on expectations for growth. Betting on prospective profits is suddenly less attractive in a higher-rate environment.A more challenging business and financial backdrop has quickly translated into a souring job market in technology. Companies have been making high-profile layoffs, with Meta announcing a fresh round just this week.That is more or less the way Fed rate moves are supposed to work: They diminish growth prospects and make access to financing tougher, curb business expansions, cost jobs and end up slowing demand throughout the economy. Slower demand makes for weaker inflation.But sometimes the pain does not play out in such an orderly and predictable way, as the trouble in the banking system makes clear.“This just teaches you that we really have these blind spots,” said Jeremy Stein, a former Fed governor who is now at Harvard. “You put more pressure on the pipes, and something is going to crack — but you never know where it is going to be.”The Fed was conscious that some banks could face trouble as rates rose meaningfully for the first time in years.“The industry’s lack of recent experience with rising and more volatile interest rates, coupled with material levels of market uncertainty, presents challenges for all banks,” Carl White, the senior vice president of the supervision, credit and learning division at the Federal Reserve Bank of St. Louis, wrote in a research note in November. That was true “regardless of size or complexity.”But it has been years since the central bank formally tested for a scenario of rising rates in big banks’ formal stress tests, which examine their expected health in the event of trouble. While smaller regional banks aren’t subject to those tests, the decision not to test for rate risk is evidence of a broader reality: Everyone, policymakers included, spent years assuming that rates would not go back up.When borrowing costs are very low, people and businesses need to take on more risk to earn money on their cash.John Taggart for The New York TimesIn their economic forecasts a year ago, even after months of accelerating inflation, Fed officials projected that interest rates would peak at 2.8 percent before falling back to 2.4 percent in the longer run.That owed to both recent experience and to the economy’s fundamentals: Inequality is high and the population is aging, two forces that mean there are lots of savings sloshing around the economy and looking for a safe place to park. Such forces tend to reduce interest rates.The pandemic’s downswing upended those forecasts, and it is not clear when rates will get back on the lower-for-longer track. While central bankers still anticipate that borrowing costs will hover around 2.5 percent in the long run, for now they have pledged to keep them high for a long time — until inflation is well on its way back down to 2 percent.Yet the fact that unexpectedly high interest rates are putting a squeeze on the financial system could complicate those plans. The Fed will release fresh economic forecasts alongside its rates decision next week, providing a snapshot of how its policymakers view the changing landscape.Central bankers had previously hinted that they might raise interest rates even higher than the roughly 5 percent that they had previously forecast this year as inflation shows staying power and the job market remains strong. Whether they will be able to stick with that plan in a world colored by financial upheaval is unclear. Officials may want to tread lightly at a time of uncertainty and the threat of financial chaos.“There’s sometimes this sense that the world works like engineering,” Skanda Amarnath, executive director of Employ America, said of the way central bankers think about monetary policy. “How the machine actually works is such a complex and fickle thing that you have to be paying attention.”And policymakers are likely to be attuned to other pockets of risk in the financial system as rates climb: Mr. Stein, for instance, had expected rate-related weakness to show up in bond funds and was surprised to see the pain surface in the banking system instead.“Whether it is stabler than we thought, or we just haven’t hit the air pocket yet, I don’t know,” he said.Joe Rennison More

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    U.S. to Challenge Mexican Ban on Genetically Modified Corn

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    The Biden administration said it would request talks with Mexico over a brewing trade fight.WASHINGTON — The Biden administration said on Monday that it would take initial steps toward challenging a ban that Mexico has placed on shipments of genetically modified corn from the United States, restrictions that have rankled farmers and threatened a profitable export.Mexico has planned to phase out the use of genetically modified corn, as well as an herbicide called glyphosate, by 2024. About 90 percent of corn grown in the United States is genetically modified.Senior administration officials have expressed concerns to the Mexican government about the measures for more than a year in virtual and in-person meetings, saying they could disrupt millions of dollars of agricultural trade and cause serious harm to U.S. producers. Mexico is the second-largest market for U.S. corn, after China.On Monday, U.S. officials said that they were requesting consultations over the issue with their Mexican counterparts under the terms of the United States-Mexico-Canada Agreement, which governs the terms of trade in North America. Biden officials said that parties to that agreement, which was signed in 2020, had committed to basing their regulation on scientific research, and that Mexico’s ban on genetically modified corn did not conform to those promises.The consultations are the first step in a process that could lead to the United States bringing a formal dispute against Mexico. The parties must meet to discuss the issue within 30 days, and, if the talks are not successful, the United States could turn to a separate dispute settlement procedure under the trade agreement. That process could result in the United States placing tariffs on Mexican products, if no other resolution can be reached.Senior officials with the Office of the United States Trade Representative said they were focused on finding a resolution through the talks at hand. But in a statement, the office said that it would “consider all options, including taking formal steps to enforce U.S. rights under the U.S.M.C.A.” if the issue was not resolved.Mexico bought more than 20 million metric tons of corn from the United States in the 2021-22 marketing year, which runs from September to August, according to the U.S. Department of Agriculture.The National Corn Growers Association has said that the impending ban would be “catastrophic” for American corn producers and Mexican consumers alike and undermine the principles of the trade agreement. The industry has maintained that bioengineered corn is safe for human consumption, contrary to health concerns cited by Mexican officials.Scientists, too, widely believe that genetically modified foods are safe, but consumers and Mexican officials remain wary of genetically modified crops.In a statement on Monday, the Mexican Ministry of Economy said its decree was aimed at ensuring that tortillas are made with native Mexican corn varieties, in an effort to ensure the biodiversity of the corn that is grown in the country. It said it would draw on data and evidence to demonstrate that the ban had not had an impact on commerce, and was consistent with the trade agreement.In the United States, the vast majority of corn planted has been bioengineered to be resistant to herbicides and insects. Bt corn, for example, contains a gene from a soil bacterium that kills the European corn borer, an insect that feeds on maize and other grasses.Corn can also be modified to be resistant to glyphosate, the most widely used herbicide in agriculture and lawn maintenance in the United States. Glyphosate-based products like Roundup are sprayed on fields, killing weeds and leaving the resistant crops intact.While the Environmental Protection Agency has said the herbicides pose no risk to human health, overuse can wreak ecological havoc in areas where natural plant species are not resistant to the chemical compound. Environmental groups have warned that glyphosate can be particularly deadly for pollinators like bees and butterflies.It is illegal to grow genetically modified corn in Mexico, where maize was first domesticated 8,700 years ago and where white corn is a staple crop. Supporters of Mexico’s ban worry that any imports of bioengineered corn would threaten native species, as the varieties can cross-pollinate.The Mexican government in February moved to soften its restrictions, saying it would allow genetically modified corn to be brought into the country for animal feed and industrial use, though not for human consumption. Tom Vilsack, the U.S. agriculture secretary, said he was “disappointed” in the decision.It also remains to be seen whether domestic corn production in Mexico is sufficient to replace imports, the eventual goal of the Mexican government. Last year, farmers in Mexico grew 27.3 million metric tons, about 38 percent below domestic demand. One analysis projected that, should the ban remain in place, corn costs could rise by 20 percent in Mexico and increase rates of food insecurity. More

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    What’s in the CHIPS Act, Aimed at Childcare Expansion and National Security

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    A sprawling new program for the semiconductor industry is foremost about national security, but it will try to advance other priorities as well.The Biden administration unveiled rules Tuesday for its “Chips for America” program to build up semiconductor research and manufacturing in the United States, beginning a new rush toward federal funding in the sector.The Commerce Department has $50 billion to hand out in the form of direct funding, federal loans and loan guarantees. It is one of the largest federal investments in a single industry in decades and highlights deepening concern in Washington about America’s dependence on foreign chips.Given the huge cost of building highly advanced semiconductor facilities, the funding could go fast, and competition for the money has been intense.Here’s a look at the CHIPS and Science Act, what it aims to do and how it will work.Funding chip production and researchThe largest portion of the money— $39 billion — will go to fund the construction of new and expanded manufacturing facilities. Another $11 billion will be distributed later this year to support research into new chip technologies.The bulk of the manufacturing money is likely to go to a few companies that produce the world’s most advanced semiconductors — including Taiwan Semiconductor Manufacturing Company, Samsung Electronics, Micron Technology and, perhaps in the future, Intel — to help them build U.S. facilities.Some will go to makers of older chips that are still essential for cars, appliances and weapons, as well as suppliers of raw materials for the industry and companies that package the chips into their final products.While some critics have questioned the wisdom of giving grants to a profitable industry, semiconductor executives argue that they have little incentive to invest in the United States, given the higher costs of workers and running a factory.The Global Race for Computer ChipsU.S. Industrial Policy: In return for vast subsidies, the Biden administration is asking chip manufacturers to make promises about their workers and finances, including providing affordable child care.Arizona Factory: Internal doubts are mounting at Taiwan Semiconductor Manufacturing Company, the world’s biggest maker of advanced chips, over its investment in a new factory in Phoenix.CHIPS Act: Semiconductor companies, which united to get the sprawling $280 billion bill approved last year, have set off a lobbying frenzy as they argue for more cash than their competitors.A Ramp-Up in Spending: Amid a tech cold war with China, U.S. companies have pledged nearly $200 billion for chip manufacturing projects since early 2020. But the investments have limits.The administration does not plan to fund entire projects: Biden administration officials say they plan to offer grants of between 5 to 15 percent of a company’s capital expenditures for a project, with funding not expected to exceed 35 percent of the cost. Companies can also apply for a tax credit reimbursing them for 25 percent of project construction.Limiting foreign dependenceGina Raimondo, the secretary of commerce, describes the program as foremost a national security initiative.While the United States is still a leader in designing chips, most manufacturing has been sent offshore. Today, more than 90 percent of the most technologically advanced chips, which are critical for the U.S. military and the economy, are produced in Taiwan. That has prompted concerns about the supply’s vulnerability, given China’s aggression toward Taiwan and the potential for a military invasion of the island.At the same time, China has increased its market share in less advanced chips that are still critical for cars, electronics and other products. The United States manufactures 12 percent of chips, though none of the world’s most advanced.Chip shortages during the pandemic forced factories to halt work and brought home in a tangible way how vulnerable the supply chain is to disruption. Workers at Ford Motor factories in Michigan and Indiana worked a full week just three times last year because of a chips shortage, Ms. Raimondo said in a speech at Georgetown University last week. That helped create a car shortage and raise the price of cars, stoking inflation.The Commerce Department says the program will also provide the Department of Defense and the national security community with a domestic source of the world’s most advanced chips.An Intel factory under construction in Arizona. The Biden administration unveiled the rules for its program to build up U.S. semiconductor research and manufacturing.Philip Cheung for The New York TimesBuilding chip hubsAccording to Ms. Raimondo, the goal is to build at least two U.S. manufacturing clusters to produce the most advanced types of logic chips, as well as facilities for other kinds of chips, and complex supply networks to support them.Commerce officials have declined to speculate where these facilities might be, saying they must review applications. But chip makers have already announced billions of dollars in plans for new investments around the United States.TSMC, which produces most of the world’s leading-edge chips, has been busy expanding in Arizona, while No. 2 Samsung is growing in Texas. Micron, which makes advanced memory chips, has announced big expansion plans in New York. And Intel, a U.S. technology giant that is investing heavily to try to capture a technological edge, has broken ground on a “megasite” in Ohio.Ms. Raimondo has said the vision is to restore the United States to a position of leadership in semiconductor technology, to the point where every major global chip company wants to have both research and manufacturing facilities in the United States.Still, there is skepticism about how much the program can do. One 2020 study, for example, found that a $50 billion investment in the industry would increase U.S. market share only to 14 percent.Protecting taxpayer fundsThe stakes are high for the Biden administration to prove this foray into industrial policy can work. Critics have argued that the federal government may not be the best judge of winners and losers. If the administration gets it wrong, it could face intense criticism.The Commerce Department said it would look closely at companies that applied for funding, to try to ensure that they were not being given more taxpayer dollars than they needed.In a decision that may irk some companies, the department said projects receiving grants would be required to share a portion of any unanticipated profits with the federal government, to ensure that companies gave accurate financial projections and didn’t exaggerate costs to get bigger awards.The Commerce Department also said it would dole out funding over time as companies hit project milestones, and give preference to those that pledged to refrain from stock buybacks, which tend to enrich shareholders and corporate executives by increasing a company’s share price.Companies are also barred from making new, high-tech investments in China or other “countries of concern” for at least a decade, to try to ensure that taxpayer money does not go to fund new operations in China.But analysts said it remained to be seen how difficult it would be to enforce these provisions. Company finances can be opaque, and when a company saves a dollar in the United States, it may then choose to invest it elsewhere.Helping workers by attaching big stringsThe program also includes some ambitious and unusual requirements aimed at benefiting the people who will staff semiconductor facilities.For one, the department will require companies seeking awards of $150 million or more to guarantee affordable, high-quality child care for plant construction workers and operators. This could include building company child care centers near construction sites or new plants, paying local child care providers to add capacity at an affordable cost or directly subsidizing workers’ care costs. Ms. Raimondo has said child care will draw more people into the work force, when many businesses are struggling in a tight labor market.Applicants are also required to detail their engagement with labor unions, schools and work force education programs, with preference given to projects that benefit communities and workers.Other provisions will encourage companies, universities and other parties to offer more training for workers, both in advanced sciences and in skills like welding. The department said it would give preference to projects for which state and local governments were providing incentives with “spillover” benefits for communities, like work force training, education investment or infrastructure construction.This is part of the Biden administration’s “worker-centered” approach to economic policy, which seeks to use the might of the federal government to benefit workers. But some critics say it could put the program’s goal of building the most advanced semiconductor factories at risk, if it adds excessive costs to new projects. More