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Should governments have some sort of enforcement mechanism to prevent offshoring? Specifically first world governments, where offshoring is mostly profitable in the first place.
Thinking of this after reading this post on X which details how a CEO basically took the U.S.'s major manufacturing of rare earth elements or refiner or whatever, and sold it off to China. This seems like a huge issue for all sorts of reasons, but especially national security.
However, obviously this offshoring has happened in many industries over the last few decades and seems to present a bad equilibrium. If all your competitors slash their labor prices by offshoring, how can domestic manufacturing compete at all? Tariffs seem like a way to do this, but apparently everyone and their mother who has any economic understanding says they're evil and bad. I really don't know.
That being said I mean... are there ways to legislate outside of tariffs to prevent this sort of major sell off of strategic business to adversarial nations?
The classic way to do this is just subsidies. If you want strategic resources or production capabilities to stay domestic, you can always just pay for it. This has - across many different nations and decades - worked mostly OK, especially for strategic essentials like food and energy production. Most western nations spend around 2% of GDP on that.
You could double that spending and easily get everything from domestic batteries to chips, from steel to rare earth metals for it. It's an absolutely enormous amount of money, after all.
And while it's probably not the most efficient way to do it since you distort/steer the market (that's the whole point), and if you overdo it you might need some export tariffs (you probably do not want to use tax dollars to subsidize foreign consumers - unless you're China and want to bankrupt your competitors production capability), it will get results.
While I do not doubt that for 2% of the US GDP, you could get some batteries, a decent range of chips and possibly REE refining, I think that for full independence from foreign markets at near-equal performance, even 100% of the GDP would not be enough.
Modern production chains are incredibly complex. A lot of products which are viable if your target market is a few billion people are not viable when your target market is just 300M. Remember when the 2011 floods in Thailand drove up hard disk prices for a year or two, because HDD manufacturing had naturally clustered in the Pacific rim?
Gains from scale are real and significant, they are what is powering the global economy. If someone in the US decides to build a game console which is made out of ore mined in America and manufactured and assembled in the US, that would require investments of many billions and result in a product which would be 10x as expensive as its international competitors.
If you want full autarky, join the Amish.
A better question would be which parts of the production chains you see as strategic important and especially vulnerable, and then think whether it is feasible to onshore these (or subsidize a friendly country building them). At the end of the day, the American people will survive if China will refuse to sell them the latest iPhone, after all.
Modern military equipment also uses high-performance computer chips. We need some way to get that even if China doesn't want us to expand our military.
I hear this a lot, and I can appreciate that it's probably true to an extent, but "milspec electronics" and "next gen process nodes" don't really overlap as much as you'd expect, as best as I can tell. I can imagine some things it matters for (radars and such), but I don't think process node differences within the last decade are really driving, say, artillery battles or even drones in Ukraine. Maybe in a few years we'll be talking about mostly-autonomous targeting systems with ML, but half of the impact of drones seems to have come from how they became commercially ubiquitous in ways that drove the price down into the "expendable" regime.
Generally I don't see this claim with listed categories of weapons systems, but maybe there is something I haven't thought of. What can you do at 3nm that you can't at, say, 65nm?
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