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If you view trade as just another production technology, it's pretty easy to see that foreign goods being cheaper is isomorphic to an improvement in technology,

If you view trade as just another production technology, it's pretty easy to see that foreign goods being cheaper is isomorphic to an improvement in technology, and therefore presumably good for overall welfare. Foreign governments could be harder to predict than "nonsentient variables", but if you think financial markets are better at prediction than governments (which is roughly the premise of the original comment) there's still no reason to think they aren't the best available solution to this difficult problem. Edit: maybe I missed your actual question. Viewed in this light, a tariff on steel is exactly an attempt to command that there shall be more steel made in Pittsburgh and less in Iowa or wherever. Domestic production is the only thing USG can command, unless they are going to send the Marines.

Chris2048 9y ago
But technological advances are fairly static. If you lead in some kind of technology, that tech won't suddenly cut you out, or cut you off. Plus, government does tinker with its internal economy, protections etc. Another question is why goods are cheapet; cheap labour is often associated with poorer working conditions, and fewer consumer protections, relying on the "market" to deal with legal issues (e.g unsafe products) diesnt really cut it. Financial markets cherry pick their domains, heavily structured representations thereof - and they ate still known for being irrational and prone to panics etc. The point is "the wisdom of crowds" doesn't work against strategic trade attacks. Your answer to my question is based on your own metaphor of "steel produced in Iowa". There is no steel produced there, only a dependency on foreign steel. If an external country needs X that they would trade for steel, they still need X if they won't trade the steel; but maybe the US can use it's own steel.

Chris2048 9y ago

But technological advances are fairly static. If you lead in some kind of technology, that tech won't suddenly cut you out, or cut you off. Plus, government does tinker with its internal economy, protections etc. Another question is why goods are cheapet; cheap labour is often associated with poorer working conditions, and fewer consumer protections, relying on the "market" to deal with legal issues (e.g unsafe products) diesnt really cut it. Financial markets cherry pick their domains, heavily structured representations thereof - and they ate still known for being irrational and prone to panics etc. The point is "the wisdom of crowds" doesn't work against strategic trade attacks. Your answer to my question is based on your own metaphor of "steel produced in Iowa". There is no steel produced there, only a dependency on foreign steel. If an external country needs X that they would trade for steel, they still need X if they won't trade the steel; but maybe the US can use it's own steel.