If we (countries) all are fully open, then we are fully globalised, and likely overall prices are lowest. (that is good)
But such system is fragile and very “shockable”, it entirely depends on stable shipping numbers and stable inter country agreements, both of which can be easily sabotaged (various motivations and agendas; just in 6 years: covid, Trump, Yemen Houthies)
Not implementable, but fun idea: protectionism based on distance, even within a country. E.g. supermarket must buy 10% of its apples from within 100km, 20% from within 1000km, 40% from within 10000km. (It does have numerous problems, feel free to identify them in comments)
Yes, please! Maximally efficient is minimally robust.
We need robustness in the global economy more than some megajillionaire needs another half cent per customer in profit.
In addition, we need competition in a lot of areas where we have complete consolidation right now. The only way to get that is to give some protection to the little guys while they grow.
Industrial Policy
It has a very bad reputation in the West but in built Japan and Taiwan
In the West it meant "protect old industries" rather than grow new ones (e.g. British steel)
Generally if you want stable and reliable local production of something, you subsidize that production or industry. You guarantee a certain amount of product will be bought/paid for even if a foreign supplier can or is willing to undercut that cost. That is why we have a large agricultural surplus in basically every western country, subsidized crops means there is money on the table for somebody to be in that industry which ensures surplus production even when other places are offering cheap food to trade.
Those can also be misapplied and corrupted, but it is still better than nothing at all or not extremely well planned and implemented tariffs which can sometimes hurt local production of other things still.
Exactly this.
Economies follow the same general principles of our distributed products. There’s good reasons you pay extra and lower efficiency (a bit) to have redundancy and resilience. We saw that we need more of it during COVID lockdown chaos.
Generally lowering tariffs has been a good thing overall, but there’s a point where it stops being beneficial.
If their laws allow their leaders to enact tariffs then sure, they're welcome to do it. Foreign relations is complicated partially because countries operate differently. In the US, Congress is supposed to levy taxes and impose tariffs. Not the president. This game of nibbling (now chomping) at the edges of that clearly outlined role needs to end.
>When for example US tech is better than the local alternative but the countries create unfair advantages to the local alternatives?
We can still enact tariffs and similar policies. We have the same mechanisms they do. I don’t understand what is so “unfair.” Trump just seems to call everything he doesn’t like “unfair.”
That is not what Trump has been doing, though. Using tariffs as retaliatory measures? As a threat because he didn’t get to "own" Greenland?
Let’s stop comparing sane political strategies to the actions of a narcissistic madman.
Have you considered all the advantages the US has over some of these countries? Is that not “unfair”? I would say the US’s relationship with the Internet is certainly an advantage even if we call it “fair.”
- always open arms for adoption (all govs prefer to use US software, although there have always been local alternatives). EU govs never really pushed adoption of their local software companies, they usually push for adoption of US tech
- extremely lax tax rules and enforcement towards US
- no protection of sales of local companies and startups (every successful EU tech company becomes US owned)
- lax enforcement of local laws towards US companies compared to EU ones. So many US businesses would be illegal but the companies do it anyway while EU alternatives have hard time existing (for example all consumer data gathering and sales but also companies like uber and airbnb)
All that is ok in eyes of EU politicians since there is “the silent deal”. But what do you do once one party doesn't keep their side of the bargain?
