An effectively managed sovereign wealth fund within the US government is making strategic and profitable investments in key technology companies like MP Materials and Intel. Spearheaded by entities within the DOD, this fund is cutting hard deals that benefit American taxpayers, suggesting a model for future public-private partnerships.

Current US policy is reactive, fixing compromised supply chains like semiconductors. A proactive 'offensive' strategy would identify nascent, critical industries (e.g., humanoid robotics) and build the entire supply chain domestically from the start, securing a long-term economic and national security advantage.

The current trade friction is part of a larger, long-term bipartisan U.S. strategy of "competitive confrontation." This involves not just tariffs but also significant domestic investment, like the CHIPS Act, to build resilient supply chains and reduce reliance on China for critical industries, a trend expected to persist across administrations.

It's naive to expect private companies to reverse the offshoring of chip manufacturing, a trend they initiated to maximize profits. Pat Gelsinger argues that markets don't price in long-term geopolitical risk, making substantial, long-term government industrial policy essential to bring supply chains back.

The core of the U.S. strategic deficit is not a lack of minerals but a bipartisan failure of leadership. Both public and private sectors are unwilling to make the long-term strategic investments necessary for national security if they don't yield immediate profits.

For today's high-uncertainty economy, a barbell strategy is optimal. It involves playing safely in liquid assets like front-end government bonds while making long-term private market investments that solve geopolitical vulnerabilities in areas like rare earths, drones, or domestic chip manufacturing.

Investing in defense, energy, and public safety is not just another vertical. These foundational sectors uphold the stable democracy on which all other tech, like B2B SaaS, depends. A failure in these foundations renders investments in higher-level software and services worthless.

To combat China's ability to dump products and destabilize markets, the US government should act as a buyer of last resort for critical materials like rare earths. This would create a strategic reserve, similar to the petroleum reserve, ensuring price stability for domestic investment and manufacturing.

A complete national industrial strategy requires a dual approach. It needs large, congressionally-approved programs for trillion-dollar sectors like semiconductors, paired with a smaller, more flexible fund to quickly address emerging choke points in smaller markets like rare earths or APIs without new legislation each time.