Looks like U.S. consumers may take it in the chin, once again, through protectionism... In this instance we'd be slapping tariffs on solar panels coming from China... This news inspired me to illustrate [for you] David Ricardo's theory of comparative advantage...
http://www.youtube.com/watch?v=u76IgGY0Jsw&feature=youtube_gdata_player
China will import the equipment that make solar panels from us, but then they will copy it and make them themselves?
ReplyDeleteMight happen with other technologies they buy from us? They probably will not buy "ordinary" stuff from us...
Taking the technology (that would be easy) in this case would not be an issue... In this case it's clearly the comparative advantage that inspires China to buy from the U.S... I.e., It's more efficient for them to concentrate on assembly, and to outsource the manufacturing equipment (and raw materials) to the U.S....
ReplyDeleteThat said... I understand that we do have a pirating problem with China... Just have to deal with it without tariffs... History, all the way back to the Great Depression, proves conclusively that tariffs can be a killer to the country imposing them...