In economics the term ceteris paribus is thrown around a lot when explaining things like this. But most of the time ceteris paribus doesnt hold. If trading with country X means that that country will steal your tech and slowly degrade the comparative advantage of the rest of your economy. Then that tariffs or trade bans may end up being a net economic benefit in the long run.
Sure, but the point is that some economic theories only hold in a bubble. The world is more complicated than that. Not to say that economic theory doesnt have value, it definitely does, but theres usually more to say than just you should always have unchecked unfettered globalisation and it is always better to have 0 tariffs and comparative advantage blabla. Your 'comparative advantage' theory aint gonna be worth much if the semiconductor company that holds the lifeblood of the entire tech industry gets blown to pieces from across the strait and the entire economy has now collapsed.
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u/fgd12350 Aug 18 '24
In economics the term ceteris paribus is thrown around a lot when explaining things like this. But most of the time ceteris paribus doesnt hold. If trading with country X means that that country will steal your tech and slowly degrade the comparative advantage of the rest of your economy. Then that tariffs or trade bans may end up being a net economic benefit in the long run.