Subject: Re: Trade deal with China reached
There's a problem with endless subsidies: the companies that get them tend to end up relying on them. Not a long term marker for success.

Seems to have worked for China, right? That's one of our major complaints about their economy - that they engage in industrial policy by providing state-run advantages to domestic producers, which give them a lasting (nigh permanent) advantage in certain industries?

The real difficulty on these issues - at least for traditional Republicans - is that what you're trying to achieve is a deviation from the free market outcome. If you believe that nearly all of the decisions in our economy should be left to individuals and firms and what they think is best for them, it's not surprising you can end up in a situation where one (or several) important products get sole-sourced from an overseas market. Stopping that from happening requires a lot of government intervention in the market.

It's unlikely that simply targeting a few strategically important goods for government intervention will work, though. Many (most?) of these goods require an ecosystem of manufacturing, transportation, energy, and labor resources that is difficult to stand up for just the handful of goods that we deem really important. Which is why tariffs are so unlikely to be a useful tool in this regard - either you set them high enough and broad enough that they end up causing massive disruptions, or they don't work.

As an example, you asked whether I wanted the U.S. to get nearly all of its PPE. The answer is, "maybe" - because it depends on what the alternative is. While there would be certainly some advantages to the U.S. producing all of its own PPE, the degree of government intervention and inefficiency necessary to get to the point where that happened as an ordinary part of the market might be vastly worse than the downsides to the status quo. Similarly, a narrower intervention - say, a whopping big tariff on just imported PPE - might also not be worth the cost; it might prompt domestic production of PPE, but if all PPE all the time in the U.S. is a lot more expensive, it might also be worse than the status quo. PPE was generally easy to source and inexpensive for most circumstances, but rare and hard to source during the pandemic - but if the alternative to that is for PPE to be expensive and somewhat hard to source all the time in order to protect against a pandemic shock, it still my be preferable to stick with the status quo and just be better about stockpiling.

There are trade-offs to trying to sever our reliance on China. It would require a much larger role by the federal government in the economy, require much more cooperation with other countries as partners (and they all have their own interests and goals), and require losing some of the security benefits that come from an engaged China. (Don't forget that one of the big motivations behind admitting China to the global economy was to make it less likely that they would engage in military adventures as a way of seeking power and influence, but instead they would have incentives to try to advance their interests in the economic sphere. If you integrate China into the global economy, they'll have a stake in the global economy and be more loathe to do things that would disrupt their position in the global economy.) Trump, in his folly, believes that tariffs are like a magic wand that can accomplish any goal, any time, all at once - but pushing China out of its spot will require a lot more than that.