Tariffs are great. They protect the struggling domestic IT industry and gives it time to ramp up its production of vintage computer parts.
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First, overall, the US has increased manufacturing output over the last couple decades. 2019 was the highest year ever, covid interupted a bit, but levels are back there again.
However the number of people involved has dropped a lot. US manufacturing prefers automation and prefers to manufacture things which are high-volume, low labor.
A good parallel is agriculture. Foods produced in the US (and the US produces a lot of food) tend towards low-labor. Think fields of wheat or corn, not vegetables. Most fresh produce comes from cheap-labor regions like Mexico (or is grown locally with foreign labor.)
So really your point is not about American manufacturing, but rather American labor.
Secondly, this free market you refer to is the American consumer. They are very price sensitive, and deeply favor cheap over good. This contrasts to a lot of the rest of the developed world which strikes more of a balance in this regard.
Since labor is cheaper elsewhere, it follows that cheap imports are favored (by the consumer) over the locally produced items. Unfortunately the imported good is often of a higher quality now (because foreign manufacturers can afford quality and still be cheap.)
So, the politicians you speak of (regardless of party) are reluctant to medel, partly because of unintended consequences, and mostly because the only real lever they have is to increase the cost of imported goods (ie tarrif them) which in turn gets consumers upset. (Witness the fury of the voter in 2020 because of more expensive goods.)
Thus while it's helpful to blame politicians, politicians are elected by consumers. Consumers who could by local, but choose not to. Consumers who vote against politicians that cause price hikes. (Even when those same politicians incentivise local production with things like CHIPS act.)
You can blame politicians, and indeed corporations all day long, but the consumers are voting with their wallets, and "cheap" is the only metric they care about.
That's fine and indeed about the only way it even can be done in a country with higher wages. The question is, why can't we do more of that? Basic simple components like capacitors should be possible to automate, so what's preventing it? Why don't we have policies tuned towards causing more domestic automation?
The number of jobs won't be what it was when it was done by hand, but that's never coming back either way, and some is better than none. Meanwhile you reduce dependency on adversarial countries.
> the only real lever they have is to increase the cost of imported goods (ie tarrif them) which in turn gets consumers upset.
There is another alternative: Lower the cost of domestic goods, i.e. lower taxes or provide credits to domestic manufacturers. For example, allow capital investments in domestic manufacturing to be deducted immediately rather than over time.
This is actually one of the longstanding major problems with the US tax code right now. It creates a preference for international supply chains because that allows profits to be shifted into countries with lower tax rates and penalizes purely domestic supply chains.
Of course they encounter their own political hurdles. Think Solar, Electric Cars, CHIPS act etc. But they become political footballs, even to the detriment of local interests. (Witness Florida reps voting to repeal CHIPS even though Florida got a lot of CHIPS money.)
So yes, companies want consistency in the supply chain, and current US politics doesn't offer that.
So subsidies, by their nature, are govt putting their finger on the scales, picking winners and losers.
And of course companies competing with those industries (coal versus solar) will lobby, and provide votes.
Bearing in mind of course that ultimately subsidies are just a tax on all citizens for the benefit of some.
So the question then is, what are you going to tax and how much? The problem right now is that we're so bad at it. To begin with the government burns money like there is no consequence to it. Huge payouts to affluent retirees who don't need the money, defense contracts for things the military doesn't even want, etc. And yes, that means you need to stick your foot up the rear end of some lobbyists. Stop being the people who say it can't be done and start being the people doing it.
> You can't (shouldn't?) subsidize all industries.
If you stop wasting preposterous amounts of money then you could lower taxes across the board and remove the anti-subsidy. But taxes are also by category anyway.
So for example, don't lower the tax rate on dividends but create new credits and deductions and faster depreciation for capital investments, or make R&D fully deductible in the first year. In other words, if you make money and use it to buy a Ferrari, you're paying tax. If you use the same money to build a factory, you get to deduct it right away. Then you're effectively subsidizing all kinds of new factories or new construction, but not subsidizing purchases of imported products. Which is like a tariff in the sense that it makes domestic products relatively more attractive, except that it does it by making things less expensive rather than more expensive.