When Protectionism Kills Talent

Could protectionist policies intended to revitalize domestic manufacturing instead weaken its core strengths: skilled workforce, innovation capacity, and talent pipeline? In the US chip manufacturing industry, we show that science and engineering employment has declined in response to protectionist measures—particularly in entry-level roles and at firms exposed to tariffs and reliant on foreign talent. Patent output fell and recruitment shifted overseas, while fewer domestic students pursued chip-related degrees, reducing the US share of global chip manufacturing expertise. Our conceptual framework shows that high proportions of foreign workers and inelastic labor supply contribute to the adverse effects of protectionist policies.