We should wonder if we want t be this dependant on one country for all our tech needs. I think the answer is no…
It’s also by far the biggest market for those materials, and a massive scale industry there. The IRA did incentivize local supply chains for many materials, but the high ROI scarcity model in US, had many announced projects cancelled, and new administration’s love for fossil fuels and funding sources for tax cuts for the rich, threaten other projects. The reason projects were cancelled is that price, even after subsidy, would be horribly uncompetitive relative to China, and includes further uncompetitive processing industry requirements, that aren’t usually the same expertise as a mining operation.
trade dependence is bad
is something you can say only when global peace is impossible, but also when your country is the one that fully decides global peace or war. War is not a path for shared prosperity. Trade dependence can be very prosperous (PPP GDP is far more important measure than nominal). Markets usually function because sellers are not forced to hate buyers, instead of trying to usually be their friend.
Far crazier than OP high tech industry suicide, is food and apparel. 1930s Smoot-Harley tariffs didn’t just amplify great depression, they directly led to global famine. Farming bankruptcies and low global trade means planting less, if surplus can’t be sold anywhere. No one will import avocados or apparel this week, and that has a bigger short term impact on lives.
I have always thought that it makes the most sense to import your non-renewable resources regardless of whether you have them domestically or not. Then, if the SHTF, you’ve got what you imported, the exporters don’t have it anymore, AND you have your domestic sources to develop.
Accusations of dumping are an easy political attack based on lower costs than you. A good response to any imagined dumping is to buy it as a strategic reserve. Subsidizing domestic production can have a national security benefit to have plants exist, but it is actual steel that is national security, and cheaper steel makes better manufacturing inputs. Buying “their” steel makes their manufacturers pay more for it.
It’s good to have production capacity ready to go, underutilizing input streams. Things like steel can do this very well, things like state of the art microchips? not as much.
It’s the natural resources in the ground that we should be using as slowly as possible, if we could buy the bulk ores and just have our own mines ready to start producing if the ore shipments ever stop, that’s the ideal circumstance - but going at it like that is a little transparent.
It’s the natural resources in the ground that we should be using as slowly as possible
Iron ore is available everywhere. Steel production is more of a bottle neck, even if emergency development of a new mine might take 1 year (but increased production from existing mines is much quicker). In US, more iron ore is exported than used in domestic steel production.
I mean, if people will pay us for gases extracted from the atmosphere, I’m all for that. And iron ore doesn’t seem to be nearly as concerning as things like copper, cobalt, lithium (though I bet the “lithosphere” has much more available lithium in it than we currently know.)
It’s also by far the biggest market for those materials, and a massive scale industry there. The IRA did incentivize local supply chains for many materials, but the high ROI scarcity model in US, had many announced projects cancelled, and new administration’s love for fossil fuels and funding sources for tax cuts for the rich, threaten other projects. The reason projects were cancelled is that price, even after subsidy, would be horribly uncompetitive relative to China, and includes further uncompetitive processing industry requirements, that aren’t usually the same expertise as a mining operation.
is something you can say only when global peace is impossible, but also when your country is the one that fully decides global peace or war. War is not a path for shared prosperity. Trade dependence can be very prosperous (PPP GDP is far more important measure than nominal). Markets usually function because sellers are not forced to hate buyers, instead of trying to usually be their friend.
Far crazier than OP high tech industry suicide, is food and apparel. 1930s Smoot-Harley tariffs didn’t just amplify great depression, they directly led to global famine. Farming bankruptcies and low global trade means planting less, if surplus can’t be sold anywhere. No one will import avocados or apparel this week, and that has a bigger short term impact on lives.
I have always thought that it makes the most sense to import your non-renewable resources regardless of whether you have them domestically or not. Then, if the SHTF, you’ve got what you imported, the exporters don’t have it anymore, AND you have your domestic sources to develop.
Accusations of dumping are an easy political attack based on lower costs than you. A good response to any imagined dumping is to buy it as a strategic reserve. Subsidizing domestic production can have a national security benefit to have plants exist, but it is actual steel that is national security, and cheaper steel makes better manufacturing inputs. Buying “their” steel makes their manufacturers pay more for it.
It’s good to have production capacity ready to go, underutilizing input streams. Things like steel can do this very well, things like state of the art microchips? not as much.
It’s the natural resources in the ground that we should be using as slowly as possible, if we could buy the bulk ores and just have our own mines ready to start producing if the ore shipments ever stop, that’s the ideal circumstance - but going at it like that is a little transparent.
Iron ore is available everywhere. Steel production is more of a bottle neck, even if emergency development of a new mine might take 1 year (but increased production from existing mines is much quicker). In US, more iron ore is exported than used in domestic steel production.
I mean, if people will pay us for gases extracted from the atmosphere, I’m all for that. And iron ore doesn’t seem to be nearly as concerning as things like copper, cobalt, lithium (though I bet the “lithosphere” has much more available lithium in it than we currently know.)