The national security argument for protection of domestic industries

Leonard K. CHENG; Gregory W. WHITTEN; Jingbo HUA

doi:10.1080/14765284.2020.1732091

The national security argument for protection of domestic industries

Leonard K. CHENG^*
, Gregory W. WHITTEN
, Jingbo HUA

^*Corresponding author for this work

Research output: Journal Publications › Journal Article (refereed) › peer-review

3 Citations (Scopus)

Abstract

Tracing the origin of the national security argument for protection of domestic industries to Adam Smith, Alexander Hamilton, and Friedrich List, we study its post-GATT applications with reference to Article XXI of the WTO and highlight some recent abuses. We compare the use of tariff, production/input subsidy, and government procurement as alternative instruments of protection from the perspective of economic efficiency and study the disapproval of inward FDI to gain insights into the underlying national security concerns. The case studies of a) the US tariffs on aluminum and steel, b) German disapproval of the acquisition of a technology firm Leifeld Metal Spinning by a Chinese firm, and c) US’ all out global effort to cripple China’s telecom equipment giant Huawei are presented for illustration.

Original language	English
Pages (from-to)	365-388
Number of pages	24
Journal	Journal of Chinese Economic and Business Studies
Volume	17
Issue number	4
Early online date	23 Feb 2020
DOIs	https://doi.org/10.1080/14765284.2020.1732091
Publication status	Published - Apr 2020

Funding

The authors would like to thank Professor K.C. Fung and an anonymous referee for their valuable comments and suggestions, and the Pan Sutong Shanghai-Hong Kong Economic Policy Research Institute, Lingnan University, for generous support.

Keywords

National security concerns
WTO’s Article XXI
case studies
instruments of protection
protection under Trump

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10.1080/14765284.2020.1732091

Cite this

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AB - Tracing the origin of the national security argument for protection of domestic industries to Adam Smith, Alexander Hamilton, and Friedrich List, we study its post-GATT applications with reference to Article XXI of the WTO and highlight some recent abuses. We compare the use of tariff, production/input subsidy, and government procurement as alternative instruments of protection from the perspective of economic efficiency and study the disapproval of inward FDI to gain insights into the underlying national security concerns. The case studies of a) the US tariffs on aluminum and steel, b) German disapproval of the acquisition of a technology firm Leifeld Metal Spinning by a Chinese firm, and c) US’ all out global effort to cripple China’s telecom equipment giant Huawei are presented for illustration.

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DO - 10.1080/14765284.2020.1732091

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The national security argument for protection of domestic industries

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