I get it, I can see why tariffs wouldn't work in Oz. But Oz is not the USA, your population is a fraction of our's, your heavy manufacturing is limited to mostly resource extraction, your export industry is obviously different as an Island-Continent.Once again you don't seem to realise that I'VE LIVED THROUGH THIS.
Australia had high tariff walls and all sorts of import restrictions to protect domestic manufacturing. Protection all round was the mantra.
It didn't work worth a damn. All we ended up with was inefficient industries with no incentive to get better & compete because they didn't have to, in bed with unions who could make wage demands way over the odds because their employers could just pass it on to the consumers, who had no choice.
Yes, protecting the supply of strategic stuff has some justification, but consumer stuff or commodity type raw materials? No.
As for the South American countries, IMO most of their problems are political screwing about with the economy. They have raw materials and educated people. Venezuela is a poster child for political interference and economic illiteracy. Their inflation rate is going to challenge Zimbabwe for worthless currency soon, if if hasn't already got there.
I didn't voice a word of support for protectionism on consumer items, nor commodity materials. And what I saw in Peru was the essential decimation of their manufacturing industries after the border protections were removed. Brazil took over South American manufacturing, but without a major quality of life improvement for their working class, and it left smaller manufacturing towns in Peru, like Chincha, with little more industry than Tico-Taxis and occasional guides for German tourists. That's just no way to live.
But wrt the U.S. economy and strategic materials, yes, tariffs can absolutely be good business. The reason that Apple has to mostly manufacture in China is because that's the most reliable way to secure their supply chain. It's not due to cost as much as people think, because the vast majority of the cost on that $1000 iPhone X is in the financing, the profit model for the distributors, the design and programming operations in California. They could manufacture those phones in Mississippi or Oklahoma if they were so inclined, at maybe just a a few buck hit on their production price. But they can't possibly do it, because China would choke the shit out of their supply chain. China controls about 96% of the world's rare earths metals market and production, and so many parts in that phone (or solar PV panel, or wind turbine or battery) are dependent on those REE dopants and electron transport. Manufacturing in China is Apple saying "we'll send you all this business, and you agree not to fuck us in supply chain, (odd, I just noticed that China and Chain are nearly the same word). Apple doesn't want people waiting months or even days for iPhones, they want as much stock as demand warrants.
Now, the USA had a rare earths element industry, and every President since Clinton has unsuccessfully tried to get it self-sustainable. All have failed. In large part, we don't have an REE industry in the USA because China is willing to sell REEs dirt cheap. But that cheap cost comes at the cost of them exercising total control of their exports. The USA did the same thing before WWII, we wouldn't sell Germany any helium, since it was a "strategic gas" and they filled their airships with hydrogen. We probably couldn't have another era of Texas Instruments and Motorola taking deep manufacturing positions in microprocessor production, because they need similarly deep supply channels for materials, and it's hard to justify investment in a pizza parlor if you don't know that you're going to get your cheese with some level of reliability.
If we have an industry that needs protection, a strategic industry that can't compete in the world economy without getting a few years to sell at a price that will allow investment and infrastructure build-out, then yes, it might be a good move. Manufacturing is a ripple ... the microprocessor fabricator won't invest in long-term build out if they can't be sure of access to the REEs. Board manufacturers won't invest in long-term build out if they can't be sure of access to the microprocessors. Products manufacturing won't invest in long-term build-out if they can't be sure of access to the component boards and batterisl. t's simplistic to the point of nonsense to dismiss any and all tariffs.
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