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Australia implemented protectionist barriers to trade for decades, and built a vibrant, functional domestic construction and manufacturing economy inside those
by ggm 2y ago
Australia implemented protectionist barriers to trade for decades, and built a vibrant, functional domestic construction and manufacturing economy inside those walls. The free market decision delivered consumer goods at lower prices. It would be trivial to observe we've also lost almost all our domestic manufacturing capacity at scale, some of which existed for strategic defence reasons: we paid for Ford and GM to build cars here both to supply domestic vehicle markets and to insure we could make tanks and aircraft. When our price support structure went, ultimately so did Ford and GM.
We still have a shipbuilding, and car assembly plants, and we are much more fully integrated into world free trade. It's a mixed blessing. Living standards have risen in general but also we're now in many ways mutually dependent, and in some aspects "weaker"
Tariffs are contextual. Tariffs are strategic. Trump's economic advisers want a reset to trade balances to favour the USA, and are using tariffs to force change and I think it will make change happen but I am less sure it will be net beneficial to the US industry sectors involved. I am also sure it will come at significant consequences for every economy, and in that process make people reconsider their bilateral trade relationships.
The US is already much less significant to Australia than it used to be, with the rise of Indian and Chinese consumers. The EU was a somewhat difficult market to trade with for us, and may now become considerably more attractive. We trade extensively with the middle east (live animals, grains) and I think will do more.
I don't like the idea the current world trade regime is going to be upset for a single nation's benefit. That aside, I don't have a theoretical problem here, with the current world trade regime having imbalances which need correcting. But the shape of those corrections aren't as simple as "America wins"
I see a lot of write ups which go to the distinction between zero-sum and mutual outcomes. I infer from this there is a strong belief Trump does not actually want any kind of mutual outcome, he only believes in "winners" and "losers" and believes there must be a "loser" and it won't be america as long as he can avoid it. Thats sad, because I think its a narrow view of what negotiation is. It's like he actually does
not understand the "art of the deal" at all. Quel Surprise!
- zahlman 2y ago(Thank you for the respectful and nuanced response. I generally agree with what you are saying.) >I see a lot of write ups which go to the distinction between zero-sum and mutual outcomes. I infer from this there is a strong belief Trump does not actually want any kind of mutual outcome, he only believes in "winners" and "losers" and believes there must be a "loser" and it won't be america as long as he can avoid it. There is a strong such belief, and people seem to be able to point to him all but saying it at times. But when I listen to the full speeches, I get the impression that there's plenty of mutual-benefit-potential rhetoric as well. Obviously the guy is no stranger to political brinksmanship, but the way this is interpreted in the press strikes me as rather naive. It's very consistent with someone who simply believes that negotiating for a better deal requires making a credible case that you can afford to refuse the current one. Thus far, Trump has shown that he's willing to extend the threat of imposing tariffs into the threat of continuing tariffs. (Thankfully, not raising them, at least as far as I've heard. 25% is, to my understanding, already an extraordinarily high level in historical context.) But he also speaks of discussions with Canadian leaders as productive and beneficial etc.