Article assumes saturated resources and finite production capacity - neither of which are true when technology is added to the picture. What if, for example, tariffs incentivize technology development that allows hydroponic wine - making previously unviable land suddenly productive?
Another counter-argument to the article: due to long-term reliance on trading partners for goods, production has likely been “turned down” for some goods/services to a point that there’s less opportunity cost than this article posits. For example the widely-quoted stat that almost one-quarter of Americans are functionally unemployed suggests trade has created new equilibria that leave capacity on the table. Especially when considering China’s well known policy of making the RMB cheaper against the USD than if it were allowed to float.
If tariffs have the potential to drive employment up by bringing latent capacity online (through investment & after a lead-time), you can see how people are okay with experimenting.
> What if, for example, tariffs incentivize technology development that allows hydroponic wine - making previously unviable land suddenly productive?
This is a variant of the Import Substitution idea. Unfortunately, it doesn’t have a great track record. Instead of investment in innovation, sheltered industries tend to become less competitive and increasingly reliant on the shelter granted to them. Indeed, even if innovation occurs, it often becomes very hard to undo the sheltering once it’s no longer needed.
Far better to allow countries with comparative advantage in growing grapes to use their land to make wine compared to investing in hydroponics. The irony of that very example is the vertical farming sector has recently learned this very lesson and is undergoing a market realignment after hopes of improved productivity have been found to be less than expected.
Another counter-argument to the article: due to long-term reliance on trading partners for goods, production has likely been “turned down” for some goods/services to a point that there’s less opportunity cost than this article posits. For example the widely-quoted stat that almost one-quarter of Americans are functionally unemployed suggests trade has created new equilibria that leave capacity on the table. Especially when considering China’s well known policy of making the RMB cheaper against the USD than if it were allowed to float.
If tariffs have the potential to drive employment up by bringing latent capacity online (through investment & after a lead-time), you can see how people are okay with experimenting.