Is this potential valid arguments for tariffs or export subsides or not, explain?
Answer:
there several similar arguments to trade protection, such as national interest, sunrise industries (those that require protection to reach a stage of development than can be freed up) and local job protection. the problem with all these arguments is that they miss the bigger picture: that resources need to be allocated in the most efficient way, or growth is not possible. in order to distribute resources in an optimal way there is a need for price signals and competition.
competition and the resulting price signals help determine what the most efficient allocation of resources are, as the organisation (or individual) that is willing to pay the most gets the resources. they will only be willing to pay a higher price if they can produce some economic gain after paying for the resources, which ensures growth.
therefore, while semiconductors may be essential, by protecting the industry and eliminating competition, this may hide the fact that it is not efficient to produce them locally. this means that total growth will be less than it otherwise could be. so in summary: no, from a pure economics point of view, there is no argument for protection. off course there are other considerations such as defence, politics etc... that may override this argument, however they are not economic arguments.
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