The pandemic, the intensifying geopolitical collisions between the US and China, and the wars in Ukraine and the Middle East are reversing decades of globalisation as Western economies scramble to “onshore,” “re-shore”, and “friend-shore” strategic activities.
It’s effectively a massive new wave of protectionism.
In the US, Joe Biden’s Inflation Reduction Act and Chips Act are seeing hundreds of billions of dollars handed out to companies, domestic and foreign, to re-shore the manufacturing of activities deemed to be strategic and to reduce America’s reliance on China for the building blocks of a green economy.
Australia is about to join the protectionist wave sweeping through major economies with its “Future Made in Australia” scheme. Credit: Alex Ellinghausen
The Europeans are similarly starting to block or tax China’s exports of solar panels, wind turbines, and electric vehicles while offering subsidies to their own domestic manufacturers. It’s protectionism in the guise of industry policy.
Of course, Australia is on the verge of contributing to geo-economic fragmentation with Anthony Albanese’s ambitious “Future Made in Australia” scheme, which envisages billions of dollars of subsidies to locally manufacture solar panels, wind turbines, and batteries and to process critical minerals.
“This is not old-fashioned protectionism or isolationism. It is the new competition,” Albanese said.
But in fact, there’s nothing new about this competition other than its acceleration.
‘This is not old-fashioned protectionism or isolationism. It is the new competition.’
China (in particular), the US and Europe have always had various levels of protection and subsidies for industries deemed strategic or politically sensitive, but the pandemic and the de-coupling of the Chinese and US economies that began during the Trump presidency have seen those policies greatly expanded and given far more visibility.
‘New Competition’? It’s protectionism with an industry policy veneer
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16.04.2024
The pandemic, the intensifying geopolitical collisions between the US and China, and the wars in Ukraine and the Middle East are reversing decades of globalisation as Western economies scramble to “onshore,” “re-shore”, and “friend-shore” strategic activities.
It’s effectively a massive new wave of protectionism.
In the US, Joe Biden’s Inflation Reduction Act and Chips Act are seeing hundreds of billions of dollars handed out to companies, domestic........
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