Basically every "made in USA" consumer product has a DOD contract. The DOD is mandated by law to purchase from US companies, so there is a huge sector of small-to-medium businesses which only exist because there is a guaranteed order coming every quarter for uniforms or boots or other equipment that would likely be 1/3 the price if they were contract-manufactured in China or Vietnam.
Not saying this is uniformly bad, because without the law the number of businesses with the ability to manufacture this stuff would trend toward zero, but it is a form of subsidy.
I wonder if this pattern is true for all militaries in rich countries. I think it sounds like good economic policy. If you want to grow your military, then you need to make sure it is spent domestically. Also, the "finish good" may include lots of parts that were built overseas. Think about a Tomohawk missile: I am sure the microchips are all made overseas. That said, the intellectual property is developed domestically (or with very close allies) and final assembly is done domestically.
US Arms exports bring in around $13 billion a year. The military industrial complex is a domestic jobs program that sells the vast majority of what it makes domestically. The US is clearly not spending a trillion dollars a year subsidizing defense in order to make their products more competitive in other markets.
I'm not sure I agree. In the aircraft industry especially the US has strongly pushed for exports. Overseas programs (TRS2, Avro Arrow) were terminated for political reasons (and replaced with F111 etc). More recently see F35 impact.
That's before we discuss the advantage Boeing has in the commercial market thanks to DoD contracts.
Your link shows that the US exports the same as the next 20 countries added together. That suggests some market dominance.
I also suspect these numbers do not include "military aid" - where weapons and munitions are "given" by the US to Ukraine wherever[1]. (But they may, I don't know.)
I agree though that the primary benefit of this is not "sales". And even if it was these aren't consumer goods. So it's not easily compared to China's approach. I'm not suggesting it's a terribly good subsidy. But it's still a subsidy.
[1] there are a lot of political benefits to be gained by having bases in foreign countries, or by port visits by US ships. Unfortunately most of those benefits have been eroded in the last 2 years. The gutting of USAid (which saved basically nothing), leaving the WHO, the tarrif nonsense, bombing Iran - all have destroyed a benevolent reputation 75 years in the making.
Sure the US benefits by giving arms to Ukraine, or having bases in other countries.
But that has nothing to do with the topic at hand which is market dominance for some industry.
>Boeing DOD contracts
This is probably the closest comparison to what China is doing. But it’s still not the same thing because the US buys equipment from Boeing, they don’t just give them direct subsidies.
The equivalent would be if China awarded Bambu a contract to provide 3d printers to schools.
To the extent that the US pursues policies that help defense companies. They don’t do it in order to help those companies compete in foreign markets. They do it because they want those companies not to go out of business for national security reasons, or because they want those companies to provide domestic jobs.
The US does other shady things, but spending massive amounts to help domestic companies outcompete foreign companies in foreign markets isn’t one of them.
Oh I agree. The US is not doing the same thing as China at all.
China is spending its money developing manufacturing of goods the world wants. It has targeted markets and the govt is spending money in those markets. The markets they have chosen have huge economic and political value.
By contrast the US has chosen to spend its (govt) money on the military. Because, you know, national security.
The US is spending just as much money as China, but focused on different areas. Your complaint (if there is one) is that China chose different markets and didn't "play the game" (as the USSR did) and base their economy on flashy weapons.
Since the collapse of the USSR in 1990 its not clear to me why US spending on military continues to grow. It's not fear of attack; there is no threat to the US itself. It has to be a desire to project power and
influence.
And yet the very limitations of that goal have been exposed in 18 months. The dismantling of USAid (or more accurately the manner of the dismantling) has destroyed 75 years of goodwill. Coupled with punitive tarifs (which are paid for by US consumers) they make the US an unreliable trade partner.
Then the war in Iran showed the very real limitations of the military. To be fair they're currently being lead by incompetence, with no clear goals or strategies. But it reinforces the point that all that military money is wasted when even simple conflicts are lost. And it further drives home the limits of that power projection in unpopular conflicts. A lesson, it would seem, the US wishes to re-learn all the time.
China it seems has different ambitions, and a very different strategy. And I get why you might not like that, because maybe (just maybe) their strategy is the smarter one in the long run.
In terms of PPP, China spends about 60% of what the US does. And looking at the trend over the last 15 years, that number will overtake the US fairly soon.
> Since the collapse of the USSR in 1990 its not clear to me why US spending on military continues to grow. It's not fear of attack; there is no threat to the US itself. It has to be a desire to project power and influence.
The exact same thing is true for China. They can’t be afraid of attack. They have the 3rd largest nuclear arsenal and the 2nd or 3rd most powerful military in the world. Yet they keep growing their military.
> The dismantling of USAid (or more accurately the manner of the dismantling) has destroyed 75 years of goodwill. Coupled with punitive tarifs (which are paid for by US consumers) they make the US an unreliable trade partner.
We have an idiot in the White House. Even when I (very rarely) agree with him on things like tariffs are useful for preventing foreign state sponsored companies from wiping out important domestic industries, he implements them in the most inept way possible.
If a country hands out enormous subsidies but yet isn't leading in anything, then maybe it's time to consider what structural reasons are causing these subsidies to be squandered and whose bottom lines are being padded.
I heard that when some country wants to pay in a different currency than USD for oil, a coup suddenly happens, or a helicopter comes and the president gets kidnapped
It basically means most of the world's currency wealth is held in the USA or backed by the USA. So the answer would be the finance sector - it's subsidized by the rest of the world.
That’s a stretch for the topic at hand. You can say hey the US does this probably morally equivalent thing, but when people are talking about subsidizing domestic companies so they can outcompete foreign companies in foreign markets, this isn’t what they’re talking about.
Ever wondered why everything in the USA contains corn syrup? Because sugar is artificially expensive (roughly double the global price) due to import tariffs that protect US sugar cane farmers.
The US chose their market (arms). The Chinese chose consumer goods. Go figure.