Stefan Bartl writes about “the march of a new global economic order.” A slice:
The bipartisan turn away from free trade has been a public-policy blunder that favors politically protected industries while neglecting consumers. That is the snowball effect of government intervention: tariffs generate retaliation, retaliation justifies subsidies, subsidies create managed purchase agreements, and managed agreements necessitate new boards, exemptions, and political bargaining.
The US–China trade war began under Trump in 2018, remained largely intact under Biden, and has escalated further in Trump’s second term. The contrast is striking: while China lowered its average tariffs on the rest of the world from 8.0 percent in early 2018 to about 6.5 percent by early 2022, the United States raised its average tariffs on the rest of the world from 2.2 percent in January 2018 to 18.4 percent today.
According to PIIE, average US tariffs on Chinese goods stand at 47.5 percent and cover all imports from China, while China’s average tariffs on US goods stand at 31.9 percent. This is no longer temporary leverage. It is structural protectionism.
Hooray – seriously – for Gov. Spanberger.
The Laffer Curve is real. A slice:
The stereotypical British émigré used to be the retiree packing up for sunnier climes in Spain or France. These days it’s the younger worker who moves to Dubai for lower taxes and then delays returning to Britain. These are some of Britain’s most entrepreneurial people, and they’re spending their prime tax-paying years out of the country.
They’re in good company. The annual “rich list” of Britain’s wealthiest, published last week by the Sunday Times of London (owned by the same company as the Journal), found a race for the exits. One-sixth of the people on the list two years ago have dropped off, and 111 of the British citizens on the 350-name list live offshore.
Only one foreign billionaire moved to Britain: Warren Stephens, the U.S. ambassador. As a diplomat, he’s exempt from British taxation.
Those who argue that Europe’s falling-behind is overstated (typically American liberals and America-skeptic Europeans) claim that for various reasons Europe’s standard of living doesn’t feel all that far behind America’s, to the point that differences in nominal output are irrelevant. European quality of life may even be better than America’s in important ways. Those on the other side (generally euroskeptic Americans and Europeans with experience of both places) observe that over the longer term a country’s capacity to participate in the global marketplace matters more than its feelings.
The latter perspective is more convincing in light of the main economic questions preoccupying Europe: How can the Continent navigate a demographic transition that will strain its social-welfare systems to the breaking point while also meeting the defense-spending demands of a more dangerous world? Any credible solutions hinge on Europe’s ability to purchase raw materials and technology on the open global market, and also to borrow from foreigners. Per capita output data gussied up by various adjustments to create hypothetical “purchasing power parity” metrics that flatter Europe don’t tell you what you need to know.
My Mercatus Center colleague Alden Abbott tells of “the case of the vanishing competitor.”
University of Dubuque political philosopher Adam Smith is an old-fashioned professor.
Billy Binion explains that “Trump’s ‘anti-weaponization fund’ is built on a contradiction.”
Judge Glock tweets: (HT Scott Lincicome)
It is actually a reasonable question to ask if any companies, in the history of humanity, have been less in need of government money than semiconductor chip companies in 2026.
This is not a sector that investors are unwilling to invest in.
