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this post was submitted on 16 Jun 2024
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Retaliatory tariffs are not really allowed by the WTO. They are really destructive for trade and just create scenarios where a third country is used to bypass the tariffs.
China has been proven to steal technology for years, it's just that the benefits of manufacturing there outweigh the costs on an individual company level. No one company can "sue China" as you suggest. They're too big and can just ban that country from manufacturing anything there. So most companies put up with it.
Your comment actually illuminates the need for US government action. Since no particular company is actually hurting China, they can't be individually retaliated against by the Chinese government.
I'm not a fan of retaliatory tariffs, I'm a fan of corrective tariffs. The tariffs should be calculated from transparent facts, or at least good estimates. And they need to be consistent regardless of origin country. If we tariff Chinese EVs and drones due to being subsidized, we should also tariff AirBus airplanes for the same reason.
Tariffs are a problem when they target a country as a punitive measure, I think they can be effective when they correct unfairness in the market. I'm a fan of carbon tariffs, for example, where estimates of carbon emissions are used to calculate a tariff on an imported good so local products with higher regulatory expectations are competing on an even field. Maybe high income areas compete with low labor cost through automation and better QC, but they shouldn't need to compete with subsidies.