Brazil tried this tariff tactic, which resulted in some middling performance knockoffs. China also has some tariffs (hence the tariff bypass AMD recently did with the JV that rebranded 3 year old Zen for the Chinese market).
In terms of building up internal silicon design talent, tariffs have not been effective in other large countries. Allwinner and Mediatek are taking off the shelf designs from ARM, getting them fabbed, and writing basic BSPs for them. The only magic here is they generally do not care to have large firmware blobs, so their hardware isn't too terrible to mainline.
I would assume that the tariffs would be a temporary measure. At the moment, there is no semiconductor industry in India to speak of and allowing foreign businesses in would mean that Indian companies would not have a fighting chance. If the industry takes off, I think the tariffs would be removed and the Indian companies would be forced to compete or sell themselves.
Income tax was introduced 'temporarily' to the UK to fund the Napoleonic wars. These things have a habit of becoming permanent. If India's semiconductor industry does take off, do you think they'd want to risk sinking it (hows that for a mixed metaphor!) by exposing it to the rapacious global market?
The way out of that would probably be the usual mutual removal of tariffs in the course of a free trade agreement. If it does take off, they might encounter other countries' import barriers which they would want to mutually remove.
That said, I'm skeptical for other reasons; it's a hard industry to build up and extremely competitive.
I am not sure if you a Brit, you sure do sound like one.
You are ignoring 400 years of trade history here.
Britain was known for imposing unfair trade treaty on the rest of the world, ( so called 'unequal treaty' in the case of the China ).
In the case of India, Tata was forbidden from selling steel in india, causing the indian steel industry to collapse.
Same for textile, boats, ... shall I go on ?
If you are so found of free trade, allow indians free visas to travel to the UK ? let's watch most brits try to compete with your 1.4 billion, 2 dollar a day indian labour ?
So there is more nuance then "muh can't sell ARM chips !"
Read my comment again, it's got nothing to do with 400 years of trade history, it's about temporary measures having a habit of becoming permanent.
Where did you get the idea I was so fond of free trade? (disclosure: I am in favour of free trade) I described international markets as rapacious. Plus free trade is about trade. Freedom of movement is about people. You can be in favour of free trade, and against freedom of movement, ask any Brexiteer.
BTW not all Indians are on $2 a day, and most that would come to the UK would be on significantly more, and we have a minimum wage so they wouldn't be competing on $2 a day anyway.
"Tata was forbidden from selling steel in india, causing the indian steel industry to collapse.
Same for textile, boats
"
Any decent write ups on this? Not something I'm really aware of.
> "Plus free trade is about trade. Freedom of movement is about people. You can be in favour of free trade, and against freedom of movement"
Why ? Humans are a form of "good" so is capital and natural resources. You cant leave 1 out of 4 - the EU single market was created with this in mind. Some countries have excess capital, some have excess labour and some have excess natural resources.
Its awfully convenient for you to leave out the ONE thing that a country like India has a surplus in and leave in the thing India is deficit in.
> and we have a minimum wage so they wouldn't be competing on $2 a day anyway.
Says who ? it depends on enforceability, ask any Indian or any Brit who lived through the Empire. Minimum wage is just a form of price control.
> Any decent write ups on this? Not something I'm really aware of.
- The Indian rupee used to be similar to the swizz franc.
- people around the world used to hold on to the rupee since it didn't suffer from rampant inflation which even many european currencies did.
- India was a major exporter of goods to SEAsia, Middle East, Europe and Africa, and imported very little.
- All of it changed when the Brits arrived.
Which comes back to my original point.
You turn forward the clock 100 years and its quite likely every Brit would be singing a different tune, high tariff on Indian semiconductor, Indian medical devices, .... . They already sing a very different tune compared to just 15 years ago with Brexit today. Where are your open markets now ?
Its awfully convenient to sit atop 400 years of plunder and loot and claim fair treatment and 'free market'.
"Humans are a form of "good" so is capital and natural resources"
Exporting humans is generally a bad thing for the exporting country (brain drain), exporting goods is generally a good thing. Goods can have tariffs applied, how would that work for humans. Immigration is much more politicised than free trade. 3 reasons why they aren't the same.
"Says who ? it depends on enforceability"
You could say that about anything. Murder is illegal, that needs to be enforced.
"ask any Indian or any Brit who lived through the Empire"
What has that got to do with anything? Did they have minimum wage legislation during the days of the empire? Because they didn't in Britain.
"Minimum wage is just a form of price control"
And what's that got to do with anything. Why are you getting all Randian, when you were complaining about me being pro free market in your last comment?
"Its awfully convenient to sit atop 400 years of plunder and loot and claim fair treatment and 'free market'"
So Italians should be apologising for what the Romans did, and Mongolians for what Mongols did, and don't get me started on the Germans. I'm sure India has it's fair share of dark chapters, its history, I wasn't born, my Parents weren't born, and my Grandparents who were born when India was in the empire are now dead, get over it.
PS I didn't 'claim free trade' or 'fair treatment', try reading my first post again, and my explanation of what I said in my 2nd post.
> Exporting humans is generally a bad thing for the exporting country (brain drain), exporting goods is generally a good thing. Goods can have tariffs applied, how would that work for humans. Immigration is much more politicized than free trade. 3 reasons why they aren't the same.
Goods are just one part of the overall economy, and an increasing small part of it. A large part of the economy is services that involves humans.
Would you consider there to be a goods drain ? or a petroleum drain ?
Exporting humans is fine if you have a surplus of them, they are just another input like capital, energy and iron. It's not the human that matters, it's the system that is capable of producing them. Your solution of nations restricting movement of its citizen is denying them their right of self determination. Would you rather keep them chained to certain countries against their will ?
> Immigration is much more politicised than free trade.
Who said ? its not as charged in many Arab Countries who are much more conservative. You could issue 10 year passport with limited voting rights. There are many types of visas you could issue based on what your society finds acceptable.
> So Italians should be apologizing for what the Romans did, and Mongolians for what Mongols did, and don't get me started on the Germans. I'm sure India has it's fair share of dark chapters
Who said anything about an apology ?
India is not some marginalized group in western society that is asking for handout. It's a nuclear state with the second largest standing army in the world.
It does not matter what I think or you think. Your original comment is ignoring what India is.
Imagine for a second if every African country joined and formed a single country, suddenly Africa would have a lot more leverage in trade. They can get things horribly wrong but they can still come out ahead and bully countries like Switzerland. Africa could introduce 100% external tariff while Switzerland could be at 0% and Africa would still come out ahead. If Switzerland went ahead and introduced 100% tariffs their economy would collapse, because Africa in total has so much buying power.
"Goods are just one part of the overall economy, and an increasing small part of it. A large part of the economy is services that involves humans"
We were talking about immigration not services, remember you mentioned visas?
"Would you consider there to be a goods drain ? or a petroleum drain"
No because I said they were different, if a 20 something emigrates, the country they grew up in has spent years educating that child, keeping it healthy, supporting the parents while they bring up the child, then just as the payback should be starting the child leaves. Its analogous to spending time and money drilling an oil well, and building a refinery, just to see the petrol walk out the door with no money coming back to you.
"Who said ?"
I did.
"India is not some marginalized group in western society that is asking for handout"
I never said it was. You're the one whose got a Bee in their bonnet about British colonialism.
"Your original comment is ignoring what India is"
I've reread my original comment and its clear enough what I said. I've also clarified what I said, so why do you keep ignoring what I have actually said in favour of what you imagine I said?
> No because I said they were different, if a 20 something emigrates, the country they grew up in has spent years educating that child, keeping it healthy, supporting the parents while they bring up the child, then just as the payback should be starting the child leaves.
See this is where we fundamentally disagree.
What if the private sector / government is unable to provide them jobs ?
India adds 1 million new white collar graduates to its workforce every month ! do you think the government would really care if 1 million of them just left ? there would be another 1 million added next month.
In fact the Indian government actively wants to send more young people to every part of the world - latin america, middle east and europe. Since those worker send back forex income.
Most of these young gradates end up working in call centers or their talent get wasted doing other low productivity work. The Indian economy cannot absorb so many graduates.
> I've reread my original comment and its clear enough what I said. I've also clarified what I said, so why do you keep ignoring what I have actually said in favor of what you imagine I said?
Your original comment states that India should open its market, you do not have to be an Indian to understand how deeply offensive it might be to people of the subcontinent ( China too ). It's like talking about 'states right' to African americans.
Let me break down the history behind your argument.
- During WW2 the Brits used 'free markets' to argue taking rice from India to Britain during a famine where 3 million people died. They used British guards to protect grannies from civilians dying outside. I have spoken to people who were alive during that famine, how well do you think they will react if you made your argument about opening India to 'rapacious global market'.
- The brits heavily taxed Indian merchant ships, selling of Indian boats - just to keep their seamen and dockworkers in london employed. While Indian workers in Mumbai couldn't sell boats to Indian merchants in their own country !
- When the brits first came to India, India was the textile factory of the world. The arguments the brits make is that their superior 'technology' and 'industrial revolution' caused the collapse of the Indian textile industry. The reality was quite different that what British historian have been pedaling. Firstly, innovation in textile has been happening for 2000 years, there was no reason for India's textile industry to suddenly collapse just when the brits started ruling over India. The height of British colonial horror was cutting off the fingers of 300,000 textile workers.
So Britain's modern success has a lot to do with actions of its rule during 'Empire' ( which need I not remind you existed just one generation ago ).
> do you think they'd want to risk sinking it (hows that for a mixed metaphor!) by exposing it to the rapacious global market?
The real 'rape' here was India's inability to protect it's interest.
How long do you think Britain will take to recover if some foreign power cut of the fingers of 300,000 bankers and coders in London ?
India needs tariffs since without it, a large number of its smaller manufacturing operations would collapse.
The best example is agricultural produce, India has high tariffs on foreign agri goods ( especially American ones) , because a country like America can just dump its large agricultural surplus onto India. This would increase rural poverty and increase rural unrest, (families earning 2 dollars / day would earn 0 dollars / day) - something India has been working towards improving.
We already know US has been subsidizing its agri sector for more than 100+ years. 100 years ago India was at the height of its colonial exploitation.
We can also examine Mexico where NAFTA increased Mexican rural poverty, increased inequality and made Mexico dependent on American food production ( something the americans would never tolerate happening to them ).
The price saving on buying American agri produce in India is also not extremely different that buying locally produced food. So its anyway a small subsidy from the well off to the peasant class.
Do you still think India should just abandon its 800 million farmers ? and introduce them to 'rapacious global market' - when their families didn't even have one generation to build equity ?
Also, when India became independent the brits thought India would collapse within 10 years, it's been 70 years and India's economy is the second largest in GDP/PPP. It's sending satellite to space and doing mars mission, and also has lifted the most people out of poverty after China.
So maybe they do not need your advice ? maybe they are doing something right ? The Ministry of Finance in India are not run by idiots, maybe finally the democratically elected government of India is doing what is best for it's people ?
Tariffs, markets and money are just tools and should be slave to national interests. In this particular case, india need to develop its own semiconductor capabilities. If it means stealing IP, tariffs, industrial espionage then so be it.
We can clap at the Brits making ARM chips, but the Indian government won't allow Britain a perpetual monopoly to sell chips in India, especially if it harms it's balance of payment.
Having said that, India normally plays by the rule much more than China due to being a democratic government ( which I think was wrong, India should have done what China did, but that is my personal opinion ) - only exception being pharmaceutical and nuclear weapons in 1990s ( both were existential threats, one to it's trade deficit and ther other to the state itself ).
The only reason why I spent so much energy on this topic is because it always hits my nerve, its deeply offensive to ignore the legacy of colonization in India when discussing free trade. It's like me trivializing north sea fish quota to Brexiteers.
In terms of building up internal silicon design talent, tariffs have not been effective in other large countries. Allwinner and Mediatek are taking off the shelf designs from ARM, getting them fabbed, and writing basic BSPs for them. The only magic here is they generally do not care to have large firmware blobs, so their hardware isn't too terrible to mainline.