I think a national security argument is much more sound than an economic one, although costs are externalized in a way that isn't obvious, i.e. ecological disaster that shipping everything around the world and back (components, assemblies) is, and hollowing out a local supply chain takes virtually no time while the impact or limits of it are hidden until abrupt breakage (i.e. covid-era shortages on basic supplies, wars, or heavy handed statesmen dictating preferential access to silicon or whatever today). That is, every nation has to maintain some stake in not hollowing out completely while still participating in global commerce.
> Economic efficiency would mean only a few vendors.
This is a massive lie monopolists tell you to justify anti-competitive mergers.
Increasing entity size has economies of scale (amortizing fixed costs over more units) and diseconomies of scale (bureaucratic overhead, long-distance transportation costs, etc.)
Economies of scale peter out with increasing entity size. Amortizing a $1000 fixed cost over 100 units instead of 10 saves $90/unit. Amortizing the same $1000 fixed cost over a trillion units instead of a million saves less than one tenth of one cent per unit.
Diseconomies of scale metastasize with increasing entity size. Entity size exceeds Dunbar number, language barriers and timezone asynchrony, corporate politics, independent jurisdictions imposing mutually-incompatible legal requirements, insufficient competition compromises incentives for efficiency as long-term incumbents succumb to Iron Law of Bureaucracy, etc.
By the time you're operating something at the scale of the entire planet, having the benefits of scale still exceed the costs of scale will happen approximately never.
Maybe.. and "a few" was pulled out of thin air, but these machines were national treasures with immense R&D expense. Think rockets, heavy aircraft, and lithography.. not commodities or software. Having stuff in these categories is kind of "you have to be this tall to ride the ride"
The history is complicated and a side quest to the conversation here, but a free market did play out in the US and became fever pitched after AT&T was hand tied in the 1980s.
A free market means if you can do something better/cheaper/faster, or at least convince other people of the promise, you have a shot. The more that come (think of a gold rush), the potential returns diminish so it will eventually be hard to either acquire revenue/customers or funding for speculative approaches if they are capital intense.
The alternative to Chinese goods is not locally made goods for the majority of people. It's either Chinese goods that we pretend are locally made, or it's nothing because they can't afford the local stuff.
Cheap good for decades has meant companies have been able to depress wages to the point no one can really live without them. Removing the cheap goods without also giving up massive corporate profits would just mean most people collapse into poverty.
Nobody wants to do the hard work of developing industry, reducing cost of living and doing business so workers are more competitive, and changing all the rules that make China 10x more attractive for this sort of thing.
real wages in western countries are down because 1. regressive inflation on essential goods like energy is faster than both wages and luxury goods and 2. rent and house prices (= mortgage costs) are up because of corporate lobbying and rich nimby homeowners.
that means if employers want to pay workers fairly they need to pay a lot more than in other countries with a cheaper economy. but even the inflated wages are not growing fast enough to catch up with cost of living. so yeah wages are too high compared to the rest of the world but also too low relative to the gdp and growth rate and corporate profits.
> that means if employers want to pay workers fairly they need to pay a lot more than in other countries with a cheaper economy.
"Pay workers fairly" isn't something that companies in a competitive market can choose whether to do. If labor costs are high, they can either pay them, move operations to somewhere else, or stop operating. If labor costs are low, paying more than that would cause them to have higher prices than competitors.
What this implies is that countries with e.g. inflated housing costs will see operations to move to other countries whenever that's feasible, and indeed this is what we see. This isn't companies choosing to do this -- different companies will do different things, but then the ones doing the thing that requires them to have higher prices will be out-competed.
You can't fix that by admonishing them to "pay workers fairly", you can only fix it by increasing the domestic supply of housing and energy.
They're banning Polestar cars that are designed in Sweden (I guess) and made in the US... because the car's Google firmware is Chinese-owned. This case isn't about saving jobs (that's what tariffs are for); it's a misguided attempt at privacy regulation.
Their cheap exports: sinister pump and dump