Tariffs and Intangible Assymetry

There's a fundamental asymmetry between China and America: Ideas spread quickly but factories are built slowly. China can catch up with American innovation faster than America can keep up with Chinese manufacturing (even if America wanted to).

Over the past decades, America's policy response has been contradictory:

1. Deindustrialize: Avoid serious efforts to modernize production and infrastructure;
2. Desensitize: Mitigate the effects by propping up uncompetitive companies (Hello, GM!) and expanding social support programs;
3. Delay: Try to hold back the flow of new ideas and technology into traditional industries, from energy and defense to healthcare and education; and
4. Neglect: Assume that peacetime economic arrangements are robust in times of war (or pandemics).

Instead, America should do the opposite:

1. Industrialize better: Moving up the value chain isn't just about software and design; it's also about embracing automation, building giga factories, and expanding energy production;
2. Reallocate: Direct government resources toward safety nets, education, and infrastructure rather than subsidizing outdated industries and business models;
3. Accelerate: Make it easier to build new projects, hire new people, and recruit talent from anywhere on earth; and
4. Prioritize: Identify strategic industries, sources, and capabilities that must be on-shored or friend-shored regardless of narrow economic considerations.

The fundamental asymmetry does not mean that globalization is bad. It means America needs to speed ahead at doing what it does best, leveraging its unique appeal to talent and capital, and use public spending to adapt to change rather than oppose it.

Plenty of other considerations, of course.
But this feels like the core.

What am I missing?

Best,

🎤 How will AI reshape our cities, companies, and careers? My speaking schedule for the spring is filling up. Visit my speaker profile and get in touch to learn more.