The US and other countries have turned their attention towards industrial policy. However, there's a potential long-run danger for workers that is rarely spoken about.
Overall, free trade is a certainly a net benefit for all. The challenge is that "free trade" isn't truly "free." Free trade agreements, for example, are almost something of an oxymoron.
From what I have read, the US trade deficit is a function of accounting. The US Dollar is used to conduct so much trade globally that countries need Dollars. To get Dollars, they must send something to the US in return, the balance sheet must balance after all. This means many economies structurally favor export industries. The US manufacturing sector has a hard time competing with subsidized export industries, but the US gets the benefit of "exporting" dollars and control of the global financial system.
For this reason, however, no amount of trade wars or tariffs will ease the trade deficit.
With trade deficits, I feel they're described as a bigger issue then they are. Since it means consumption is higher for a trade deficit country than it would be otherwise. Concerns around long run consequences I think disregard that a country can relatively quickly adjust to new realities - just as developed economies moved from manufacturing to other sectors very quickly. These transitions do hurt individuals, but not much in the aggregate.
Overall, free trade is a certainly a net benefit for all. The challenge is that "free trade" isn't truly "free." Free trade agreements, for example, are almost something of an oxymoron.
From what I have read, the US trade deficit is a function of accounting. The US Dollar is used to conduct so much trade globally that countries need Dollars. To get Dollars, they must send something to the US in return, the balance sheet must balance after all. This means many economies structurally favor export industries. The US manufacturing sector has a hard time competing with subsidized export industries, but the US gets the benefit of "exporting" dollars and control of the global financial system.
For this reason, however, no amount of trade wars or tariffs will ease the trade deficit.
I actually wrote about the issues around the term free trade (and would prefer simply trade agreements) so I agree there - https://www.nominalnews.com/p/when-free-trade-isnt-free
With trade deficits, I feel they're described as a bigger issue then they are. Since it means consumption is higher for a trade deficit country than it would be otherwise. Concerns around long run consequences I think disregard that a country can relatively quickly adjust to new realities - just as developed economies moved from manufacturing to other sectors very quickly. These transitions do hurt individuals, but not much in the aggregate.
This is great, will have a read.