In your example the government could hypothetically motivate a US-based company to maintain additional emergency capacity. Though as @ParallelLines correctly points out, the government changes its mind every 15 minutes so ensuring continuity would be really hard. Maybe impossible. Even if it was mandated by law and not just executive action, it’s still subject to hyper-partisanship and unfunding under subsequent Congresses.
But the real issue, the more serious issue, is that so much critical stuff is offshored. This is the problem that we’ve yet to see the government adequately address. Your suggestion does nothing at all to solve that problem when no US-based factories exist in the given space.
The issue with masks was more that the American companies couldn’t compete, and the previous administration bungled the ordering and distribution, etc… Look up Prestige Ameritech’s saga for an example. They could have cranked out nearly 2 million masks a week, but the government wouldn’t commit to orders big enough to make it worth it for them to reactivate extra N95 lines. Then when they did produce masks, the government bungled the distribution, leaving millions in warehouses while healthcare workers needed them. The big worry for the company was that they’d actually lose money if they reactivated the lines without large enough commitments to make it worth their while.
In some cases though, the government does actually buy stuff with the express intent of keeping the companies’ capabilities available in case of emergency. Every so often, you hear a bunch of frantic griping when the Navy is buying submarines that “it doesn’t need”. Even though there may not be a Navy operational need, there’s a need to keep that sub-building infrastructure going and up-to-date, even if it means buying subs that aren’t strictly speaking, necessary. Think Saturn V… we couldn’t build one today without a massive program to re-engineer and re-design the whole thing from the examples we have. The tooling, the experience, etc… is long gone. We still have rocket engineers and so on, but there is a LOT of work in making a new heavy-lift rocket - see the SLS for an example. Had we kept building them at a low rate for the past 50 years, we could still build them, and we’d almost certainly have upgraded various parts as we went.
The catch is that if the government decides to make a high-volume, short-time frame order for N95 masks in order to ensure that capability is there in case of emergency, some self-appointed gadfly or starving investigative reporter will have a shit-fit because the government didn’t need to pay X many millions of dollars to get Y many masks in Z amount of time, and it’s a waste of taxpayer dollars!
I guess that’s the kind of thing people say when they live in a country with a large amount of domestic production.
Those of us who actually live in export-oriented economies know that, in spite of the misunderstanding of certain ‘random posters on the internet’, punitive tariffs really hurt exporters.
Nah, has nothing to do with that. It’s just bullshit libertarian talking points. It’s kinda like saying “taxes are hurting the rich” or “regulation is crushing business”.
Ultimately a tariff is a tool to a) influence behavior in the market and b) recover some of the costs that are being externalized.
Tariffs are typically bad not because the imposing company “pays” them, but because they tend to trigger retaliation. Tariffs can be great tools when the exporting country isn’t tightly integrated into a bunch of other parts of your economy making retaliation less likely. They also only really work if they are paired with incentives for importers to move to domestically produced products instead. It’s got to be part of a strategy.
I am not sure I understand. Certainly if the exported product is produced by a large number of sources and the demand is price sensitive, then unless the tariff is applied uniformly on all importers, then some exporters will lose business. But not all products meet those criteria.
It’s basic macroeconomics. If a good, usually a raw material, is available from many equivalent sources then a tariff on one bad-acting trade partner will have a potentially devastating affect on that specific country. The consumers in the importing nation who imposed the tariff will either buy from the exporters who are outside the tariff, costing them some or all of their market share or it will force the tariffed exporter to lower their prices to offset the tariff and still compete. This will significantly depress their profits and could destabilize the industry.
Things are quite a bit different when the tariffed item is not a commodity. In that case one of three things will happen, the consumers in the importing country will maintain the demand at a higher price, the exporting country will reduce their prices or the importer will buy less as certain consumers get priced out.
Don’t forget the foreign exchange aspect too. A high Australian dollar (for example) is great for us as consumers because we can buy stuff from overseas (including the US and Europe) for much less, but it’s not good for our exporters (and a big chunk of our economy is based around selling minerals and primary produce), because people overseas can go “Well, now the exchange rate isn’t favourable for us, we’re going to buy less of your stuff and instead get more from Elbonia, whose currency is worth even less than yours”.