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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?
Smart leadership solves this.
China doesn't explicitly have a policy against offshoring (though they have been trying to keep India from getting the tools and capital to compete), they have a strategy of fostering industry in their own country. They have smart leadership.
It's not just offshoring that matters, what about foreign countries paying large sums for key workers to come over and share skills? China did this to South Korean shipbuilding when they were in a slump, paid the best people to come over for a few years. And now they have the biggest shipbuilding sector in the world.
And why is offshoring a thing? Energy costs are lower, environmental regulations less severe. Smart leaders would lower the cost of energy and industrial inputs by relaxing the most onerous renewable/environmental/planning restrictions. Smart leaders would make the labour market more flexible (US hasn't done too badly here compared to other rich countries), would prevent ridiculous anomalies like caps on doctor training, would invest more in R&D, would modernize infrastructure, would shamelessly steal other people's IP as they see fit.
Individual policies are ineffective if the leadership is stupid. Subsidies just encourage inefficiency and corruption without discipline. Tariffs can be very harmful for imported components and cause uncertainty if they're raised and lowered willy-nilly.
Subsidizing R&D can also just result in people relabelling things as R&D, reducing energy costs can encourage inefficiency... Everything has a 'perverse incentives' evil twin. Sanctions on exporting sensitive technologies can just be busted or third-party routed around, as the US has discovered with AI chips. Any smart person could tell you that it's dumb to sell rare earth mines off to China, whether it's 1995 or 2025. But smart people do not run the US government.
Individual policies must be well-implemented and precisely targeted by a responsive, dynamic bureaucracy in accordance with a coherent long-term vision. It's a crisis of intelligence, not policy.
China intensively polices any kind of capital or resource outflow. Chinese businessmen have sometimes gotten in trouble for just moving 40 million dollars out of the country to buy an overseas business.
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