A Rising Star in the Biden Administration Faces a $100 Billion Test

WEST LAFAYETTE, Ind. — Gina Raimondo, the commerce secretary, was assembly with college students at Purdue University in September when she noticed a acquainted face. Ms. Raimondo beamed as she greeted the chief govt of SkyWater Technology, a chip firm that had introduced plans to construct a $1.8 billion manufacturing facility subsequent to the Purdue campus.

“We’re super excited about the Indiana announcement,” she stated. “Call me if you need anything.”

These days, Ms. Raimondo, a former Rhode Island governor, is the most necessary telephone name in Washington that many chief executives could make. As the United States embarks on its largest foray into industrial coverage since World War II, Ms. Raimondo has the duty of doling out a gorgeous amount of cash to states, analysis establishments and firms like SkyWater.

She can be at the epicenter of a rising Cold War with China as the Biden administration makes use of her company’s expansive powers to attempt to make America’s semiconductor business extra aggressive. At the identical time, the administration is choking off Beijing’s entry to superior chips and different expertise essential to China’s navy and financial ambitions.

China has responded angrily, with its chief, Xi Jinping, criticizing what he known as “politicizing and weaponizing economic and trade ties” throughout a assembly with President Biden this month, in keeping with the official Chinese abstract of his feedback.

The Commerce Department, beneath Ms. Raimondo’s management, is now poised to start distributing almost $100 billion — roughly 10 instances the division’s annual finances — to construct up the U.S. chip business and increase broadband entry all through the nation.

How Ms. Raimondo handles that activity could have huge implications for the United States economic system going ahead. Many view the effort as the finest — and solely — wager for the United States to place itself in industries of the future, like synthetic intelligence and supercomputing, and be sure that the nation has a safe provide of the chips essential for nationwide safety.

But the dangers are equally enormous. Critics of the Biden administration’s plans have famous that the federal authorities is probably not the finest decide of which applied sciences to again. They have warned that if the administration will get it incorrect, the United States might give up its management in key applied sciences for good.

“The essence of industrial policy is you’re gambling,” stated William Reinsch, a commerce skilled at the Center for Strategic and International Studies, a suppose tank. “She’s going to be in a tough spot because there probably will be failures or disappointments along the way,” he stated.

The consequence may even have ramifications for Ms. Raimondo’s political ambitions. In lower than two years in Washington, Ms. Raimondo, 51, has emerged as considered one of President Biden’s most trusted cupboard officers. Company executives describe her as a skillful and charismatic politician who’s each engaged and accessible in an administration typically identified for its skepticism of huge enterprise.

Ms. Raimondo’s work has earned her reward from Republicans and Democrats, together with labor unions and firms. Her supporters say she may ascend to a different cupboard place, run for the Senate or maybe mount a presidential bid.

But she is beneath shut watch by Senator Elizabeth Warren of Massachusetts and another left-wing Democrats, who’ve criticized her as being too solicitous of company pursuits. Some progressive teams have accused Ms. Raimondo of being beneath the affect of huge tech companies and never completely disclosing these ties.

“Secretary Raimondo’s job is to help grow an economy that works for everyone, not to be the chief lobbyist for the Chamber of Commerce,” Ms. Warren stated in a assertion to The New York Times. “I have real concerns about the department’s approach, whether it’s approving assault weapon sales, negotiating trade deals or supporting big tech companies.”

Those criticisms have been fanned by rumors in latest months that the White House is contemplating Ms. Raimondo to function the subsequent Treasury secretary if Janet L. Yellen, the present occupant of that publish, ultimately steps down.

Caitlin Legacki, a spokeswoman for the Commerce Department, dismissed hypothesis about Ms. Raimondo’s subsequent strikes as “wheel spinning.”

“As has been previously reported, Janet Yellen is staying at Treasury and Gina Raimondo is staying at Commerce,” Ms. Legacki wrote in an e mail.

Ms. Raimondo says she is raring to steer the Commerce Department by means of its subsequent chapter because it tries to construct up America’s manufacturing sector. While the scale of the activity is daunting, it to this point has not fazed Ms. Raimondo. Colleagues and relations describe her as having little aversion to battle and say she is drawn to messy coverage issues by an impulse to repair them.

Ms. Raimondo grew up in Rhode Island in a close-knit Roman Catholic household, raised partly by a brother 13 years her senior who recalled wrestling together with her and throwing her in the water at the seashore.

She was “afraid of pretty much nothing,” stated her brother, Dr. Thomas J. Raimondo, a pulmonologist in Warwick, R.I. “I think because we brought her up tough, but No. 2, she’ll enter a conflict figuring out, ‘How am I going to fix this?’”

In the sixth grade, she was additionally deeply influenced by watching her father lose his job at the Bulova watch manufacturing facility as American producers started sending jobs abroad. The job was a supply of satisfaction for her father and allowed him to offer for his household, and the loss despatched him into a funk for years, Ms. Raimondo stated in an interview. Her mom had shone in a job in human relations at U.S. Rubber, Ms. Raimondo stated, however she was dismissed when she turned pregnant, a widespread coverage at the time.

As Ms. Raimondo grew up, different producers like Timex and U.S. Rubber shut their doorways, and he or she noticed Rhode Island’s faculties and infrastructure start to fray. The significance of those closures would resonate when Ms. Raimondo studied economics as an undergraduate at Harvard, the place her professors fed her a “steady diet” of how trickle-down Reaganomics had hollowed out the U.S. economic system, she stated.

It was additionally this decaying system — particularly, Rhode Island’s resolution to slash public bus routes and library hours when budgets fell quick — that in the end drove Ms. Raimondo to go away a profitable job in enterprise capital and run for state treasurer in 2010. There, she made adjustments to shore up the state’s pension system, clashing with unions and progressive Democrats in the course of.

She was elected as the state’s first feminine governor in 2014. In that job, she launched free neighborhood faculty and all-day kindergarten, repeatedly raised the minimal wage and reduce enterprise taxes. She additionally courted controversy by proposing a toll on business vehicles to rebuild the state’s roads and bridges. In 2016, 18-wheel vehicles circled Rhode Island’s State House for months, blasting their horns in protest and rattling the nerves of Ms. Raimondo’s employees.

Mr. Biden, then vice chairman, got here to her protection. He traveled to Providence to applaud her efforts and examine a native bridge that he stated was being held up by “Lincoln Logs.”

“Let the horns blow,” Mr. Biden stated. “Fix the bridges and the roads.”

Ms. Raimondo was additionally gaining political assist elsewhere in the Democratic Party. She grew shut with Mike Donilon, a prime adviser to Mr. Biden, and his brother Thomas E. Donilon, who served as nationwide safety adviser to President Barack Obama. In 2020, she was a nationwide co-chair of Michael R. Bloomberg’s presidential marketing campaign and was floated as a potential operating mate.

Mr. Biden and his workforce vetted Ms. Raimondo as a potential vice chairman. After Mr. Biden received, they thought of her to steer the Department of Health and Human Services earlier than deciding on the Commerce Department, a sprawling company that oversees commerce, climate monitoring, the Census and expertise regulation.

At Commerce, Ms. Raimondo has taken an energetic position in commerce negotiations, at instances overshadowing the Office of the United States Trade Representative, which historically crafts the nation’s commerce offers. She performed an outsized position in a few of the administration’s main legislative victories, together with reaching out to executives to win their assist for the infrastructure invoice and leaning on her relationships with lawmakers and executives to get funding for the semiconductor business put into regulation.

Ms. Raimondo has additionally presided over the most aggressive use of the Commerce Department’s regulatory powers in a technology. While the division is well-known for its position in selling enterprise, it has an more and more necessary position in regulating it by policing the sort of superior expertise that U.S. companies can share with China, Russia and different geopolitical rivals.

In February, her division moved swiftly with allies to clamp down on expertise shipments to Russia following its invasion of Ukraine. And in October, the division issued sweeping restrictions on superior semiconductor exports to China in an try to curtail the nation’s entry to essential expertise that can be utilized in struggle.

But Ms. Raimondo has additionally obtained some criticism on that entrance. Republican lawmakers and others say she has not moved forcefully sufficient to cease U.S. corporations from enriching themselves by promoting delicate expertise to China. In explicit, critics say that the Commerce Department has issued too many particular licenses that provide corporations exemptions to the restrictions on promoting to China.

In an interview, Ms. Raimondo stated that the declare was “just not true” and that exemptions have been primarily based on technical specs, not political concerns.

The restrictions that the Biden administration issued on China’s semiconductor business final month are “the boldest, most coherent strategic set of policies that the Commerce Department has ever rolled out with respect to export controls,” Ms. Raimondo stated.

When it involves overseeing business, Ms. Raimondo has stated she sees cheap regulation of enterprise as a necessity, saying firms left to their very own gadgets will “get greedy.” And she has been outspoken about bettering dwelling situations for America’s poor, typically decrying an financial system the place many ladies and other people of coloration can work 60-hour weeks however nonetheless stay in poverty.

But not like some progressive Democrats, Ms. Raimondo clearly doesn’t see a difficulty with being labeled “pro-business.”

“I come from a place in my politics that, fundamentally, Americans are pro-job, pro-business, pro-wealth,” she stated. “Americans want to make money and feel like they can make money.”

She added: “American entrepreneurship is the envy of the world. We cannot snuff that out.”

While she got here from humble beginnings, Ms. Raimondo and her husband, Andy Moffit, a former govt at McKinsey & Company who’s now chief folks officer at a well being care expertise platform, have amassed a internet price of between $4 million and $12.5 million, in keeping with authorities disclosure kinds.

As her division turns to funding semiconductor tasks, Ms. Raimondo has promised to make use of robust requirements to guage firm functions, together with prohibiting cash from getting used for inventory buybacks or to make investments in superior expertise in China. The Commerce Department is predicted to steer the work of reviewing and approving grants, however any awards to corporations of greater than $3 billion will likely be authorised by Mr. Biden himself.

At an occasion held by the Atlantic Council in September, Ms. Raimondo acknowledged that folks have been watching carefully and that the administration’s credibility was on the line.

“Did you get it right? Did you meet the mission? Was it impactful?” she requested. “And if the answer is yes, I think we will be able to convince Congress and others to do more.”

Alan Rappeport contributed reporting. Kitty Bennett contributed analysis.