From a Clean Economy to a War Economy: Industrial Policy as an Expression of Values
By Annabelle Luo
The Trump Administration is pushing for unprecedented increases in defense spending, and pushing more American manufacturers deeper into the war economy. As Trump unravels the previous administration’s investments in the clean economy to fund war and automation, consumers, workers, communities around the world, and our planet pay the price.
Mining for Defense; Forsaking the Clean Economy
Minerals have long been critical to many economic industries. From agricultural fertilizers, computer microchips, defense and aerospace engineering, to clean energy infrastructure, rare earth minerals have catalyzed new innovations across industries. Nonetheless, the demand for these natural resources has surged as industries compete for their finite supply. This race to control global supply chains has given minerals a new geopolitical value for governments. Shifting geopolitics have drastically changed world trade patterns, government-to-government relationships, and reoriented national spending priorities towards so-called national security.
The Trump administration’s allocation of critical minerals signals Trump’s shift from a clean economy to a war economy—a shift that regular Americans will bear the cost of. Department of Defense (DoD) spending on minerals projects has ballooned 1,657% in the past five years, and Trump has doubled down on this trend. Instead of prioritizing investments in the clean energy supply chain, Trump is accelerating dealmaking to secure minerals for defense and AI industries, while weakening environmental safeguards on new mining projects.
Researchers at the Oakland Institute found that achieving the net zero vision put forward by the International Energy Agency relies on only a fifth of the critical minerals forecasted to be mined in the coming years. Mining is a destructive process often linked to human rights violations and environmental harm, so reducing the need for new mines is critical to a truly clean energy transition. Because clean energy requires these minerals, investing in circularity and recycling technology to reuse already extracted minerals is more sustainable than opening new mining projects, which the Trump administration has prioritized.
Since taking office for the second time, the Trump regime has exploited the power of office to use taxpayer dollars to fund minerals deals and mining projects with direct links to the defense sector. For example, the Vulcan Elements Reelement project in North Carolina and the MP Materials’ Mountain Pass Project were heavily financed by the Department of Defense. In addition to financing, the Pentagon and Department of Defense recently took a 10% equity stake in Trilogy Metals and a 20% equity stake in The Elmet Group. Many of the projects backed by Trump are linked to corruption, self-dealing, and financial benefit for Trump’s corporate cronies.
Now, the Trump regime is pushing for unprecedented increases in defense spending and pushing more American manufacturers deeper into the war economy. Trump’s proposed 2027 defense budget is a whopping $1.5 trillion, a record high and a proposal that, if approved, would be the largest U.S. defense budget since World War II. At least $100 billion of this proposal will be for critical mineral projects and related supply chain projects.
From Clean Vehicles to Defense Production
As if directing funding towards mining for war wasn’t enough, Trump has also taken deliberate steps to gut economic incentives for clean energy technologies and related industries. Notably, Trump’s so-called One Big Beautiful Bill (OBBB) slashed domestic clean energy programs previously passed under the Biden Administration in the Inflation Reduction Act (IRA). For example, the IRA offered tax breaks and financial incentives for automakers like Ford and General Motors (GM) to manufacture electric vehicles (EVs). Before the OBBB slashed these programs, Ford and GM were some of the leading automakers in the EV space. After these cuts, US auto manufacturers rolled back their EV commitments and are now being called on by the Trump administration to use their manufacturing capacity for defense. Trump’s deprioritization of clean energy investments jeopardizes the United State’s ability to combat the worsening climate crisis.
In a June press release, President Trump announced that American automaker General Motors (GM) will be transitioning some of its factories to weapons manufacturing in collaboration with defense contractor Lockheed Martin. Even more recently, the Department of Defense approached Ford to help the Pentagon engineer new military tactical trucks. These partnerships come from the need to rapidly increase production capacity to replenish equipment and munitions after heavy use in Trump’s illegal war with Iran.
As of June, 2026, the Iran war has cost the American people approximately $40 billion, with a majority of the costs arising from lost munitions and equipment. The first 14 days of the assault on Iran resulted in over 5.5 million tons of carbon dioxide emitted—roughly equivalent to the emissions of 1.1 million gas-powered vehicles over a year.
For the cost of the ongoing war with Iran, the United States could have instead installed more than 250,000 public EV fast chargers or retrofitted more than 5 million American homes to be more energy efficient—saving families an average of 20% on energy bills a year.
Investments in Defense Cost More and Create Fewer Benefits
While Trump has touted his commitment to bringing back manufacturing jobs, defense spending does not have the same job creation benefits as investments in life-affirming sectors like education, healthcare, renewable energy, or the clean economy. According to a report from the Brown Watson School of International and Public Affairs, spending in the military sector is the least effective at creating jobs and supporting the domestic economy compared to the job creation potential of investments in education, healthcare, infrastructure, energy retrofits, wind, and solar. For example, every million dollars spent in energy retrofits would create 64% more jobs than if that money had been spent on defense.
At a time when Americans are struggling with the cost of living and cuts to social services, increased spending in the defense industry feels like a slap in the face. For example, the war in Iran is directly linked to increased gas prices while the Trump administration dismantles clean energy projects. Trump’s administration has shown that investing in the health and future of everyday Americans is not a priority over perpetuating illegal wars and civilian casualties abroad.
Investments in clean energy continue to pay dividends after construction is complete. But, once a bomb is dropped, the only return on investment is in the form of mass human suffering and toxic environmental waste. What we build, and how we build it, is a reflection of the priorities and values of the federal government. The defense industry does not promote a future where Americans face less unemployment, a more hospitable planet, and a cleaner conscience. It’s time for our spending and our industrial policy to reflect our values and help create a more just and hospitable planet.