I get it when Ricardo uses the England/Portugal example in wine and cloth. But when you decimate the production of those goods in England, what do you do with the people that used to produce those goods in England? AND what do you do to make sure that Portugal doesn't exploit that advantage to gouge England by raising their prices because they are, in that simplistic example, the 'sole source' of those goods.
You are looking at the absolute advantage. The optimal use of resources is based on
comparative advantage, not absolute advantage.
Even though Portugal has an absolute advantage in producing both wine and cloth more efficiently than England in that two nation, two product world, their overall economy benefits if they only produce wine and import cloth from the less efficient England. England benefits from only producing cloth and not producing wine.
Both countries remain fully employed, both countries retain access to both products, the overall standard of living for both nations rises.
If Portugal raises prices on wine, as the world's sole source, they would sell less of it, their employment would suffer, and they'd be able to afford less cloth.
This is a simple example, but this whole conversation is based on simplifications-- understanding the simple example here helps understand what motivates economies to not try and be entirely self sufficient (autarkic). It's just not a good use of resources to operate that way, it's better to let each economy leverage its comparative advantages and then trade among them.
American manufacturing being moved to other countries has opened up this country to opportunity of being held for ransom by those producing countries,
This is a national security argument, and really only applies in the most narrow of circumstances. If you're worried about your country's ability to defend itself, you mandate the military establish domestic supply chains or limit foreign purchases to trusted allies.
If the concern is an inability to produce key items for consumer use, tariffs don't really solve that problem either. In fact it actually triggers the condition you're afraid of except it's the nations own government ransoming products for tariff payments rather than a foreign government doing it for political leverage.
Semiconductors are a recent example that I think was perhaps overblown, but serves as a template. In that case the concern wasn't even that we were dependent on an adversarial nation for goods-- the concern was that the friendly nation being relied on may be insecure.
It's also interesting to note that semiconductor fabrication is kind of the model for the kinds of production people think would be well suited to strong economies-- with a high automation to labor ratio and requiring cutting edge science.
The approach here was government subsidies to incentives foreign investment (TSMC plants) in the US and direct investment in the likes of Intel (which could be a trigger for foreign tariffs) and an education initiative to train potential workers. This is at least a little better than tariffs because it actually funds a solution rather than creating a problem that you hope gets solved in a certain way.
Maybe it will keep the US competitive with Taiwan on cutting edge devices. I find it more than a little problematic though that a company that has performed as dismally as Intel over the past decade is spared the economic consequences through government largess.
and also opened up an avenue for deliberate or accidentally tainted goods doing grave damage or death to American citizens.
This is a regulatory and inspection issue that applies to domestic producers just as strongly as foreign ones. Tariffs don't prevent bad products. There's likely a side effect by which it encourages them though by raising the cost of producing those products and thus encouraging corner cutting.
I guess America is in a poor position to be throwing around tariffs as we have no other option for so many of the good that we need and moving more production overseas is just making it that much worse.
I think you underestimate the breadth and depth of the US economy and of the global economy. The US has plenty of options for just about all of the goods it consumes, including domestic options. It certainly has the ability to build capacity to replace foreign sources if it chose to.
The point is primarily that because the US has so many options it chooses to keep the ones it is best at for itself and relies on other nations for things it is (compared to itself) less good at. What Ricardo pointed out is that even if you believe that the US is better than every other nation at everything, it is still best for the US to focus on what it most excels at and rely on trade for everything else.
