Recently, ex-Treasury Secretary Janet Yellen expressed skepticism on CNBC about President Trump’s ambition to bring manufacturing back to the United States, calling it an unrealistic goal. This contrasts with President Biden’s advocacy for the revival of US manufacturing during his election campaign, a key element of his plan to revamp the economy from the ground up and the center out.

Yellen’s stance raises questions about her alignment with Biden’s standpoint and doubts about policies like the CHIPS Act aimed at urging semiconductor companies to relocate production to the US. She also criticized Trump’s tariff policies, deeming them unnecessary and harmful. However, when President Biden maintained those tariffs on Chinese imports and even added new ones, there was no visible opposition from Yellen.

It poses the question of whether Yellen’s lack of confidence in US manufacturing and disapproval of tariffs are due to her disagreement with Trump’s administration or based on her deep belief that the US cannot effectively compete in these areas. If the latter is true, Yellen should have openly opposed allocating billions of taxpayer dollars to what she perceives to be an unachievable objective.

Shortly after Yellen’s remarks, Nvidia disclosed its intention to create AI supercomputers exclusively in the US for the first time. The chip maker also revealed plans to establish a significant manufacturing presence, aiming to generate $500 billion worth of AI infrastructure within four years. Several other companies like Johnson & Johnson, Softbank, Novartis, Lilly, and Taiwan Semiconductor Manufacturing Company have also pledged multibillion-dollar investments in the US lately.

Trump’s tariff policies proved fruitful, incentivizing various companies to invest in the US to access its large consumer market. While Yellen downplays the feasibility of bringing manufacturing back to the US, he argues that shifts in the job market due to the increasing role of AI and robotics are likely. Decades of high production costs have hindered America’s competitiveness, but advancements like automation may reduce the wage gap with overseas producers. Additionally, the US’s favorable energy prices and business-friendly regime contribute to its appeal for foreign investors.

Judging from these positive indicators, Yellen’s pessimism seems misplaced, mirroring her past misjudgments on other issues like inflation, incorrect placement of blame for price spikes during her tenure, and misleading comments regarding Iranian oil sanctions enforcement. Her failure to secure low interest rates for the US national debt still resonates as a critical lapse with lasting repercussions. Renowned investor Stanley Druckenmiller criticized her actions, labeling them as the most significant blunder in US financial history and advocating for her removal from office.