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Notes -
Tarriffs are bad.
Tarriffs are bad because they are a particularly inefficient sort of tax. Retaliatory tariffs are bad because they're tariffs.
But--
To the extent that it is pigouvian-- to the extent that it promotes industries that have positive externalities (like, e.g., the defense industry, or the
propagandamedia industry) Industrial policy may be good. The efficient way to do it is probably some mix of Land Value Tax and subsidies though. That and getting rid of intellectual property law. That part is really important. I ride an electric unicyle, and segway has all the important patents for that... but chinese companies are doing all the innovation, because segway has no american competition to drive it and also because it can't just yank everyone else's good ideas and use it for itself.Let our industries buy and copy whatever they need to get their supply chain to work, and then subsidize american consumers buying domestic products in proportion to how much of the value of that product accrued domestically and in proportion to the externalities generated by the industries in question. (Sort of like a reverse VAT tax, funded via LVT. Except industries that cause a lot of local pollution don't recieve subsidies, because we want bolivia polluting itself, instead of having to mine our own lithium.)
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