Earlier quoted context omitted.
It's actually a case for free trade. CVDs are meant to balance out the advantages of foreign subsidies (protectionism) and provide a level playing field for domestic (US) industries. As far as I'm aware there aren't any such laws about free trade between states, so when Louisiana passes subsidies and takes work from California, I don't think there's anything you can do about it. But once it goes international, variou…
so when Louisiana passes subsidies and takes work from California, I don't think there's anything you can do about it. Sorry for straying off topic, but doesn't this send up any flags? I mean, on one hand, we can see that states can compete against each other (so long as they don't interfere with trade). And on the other hand, the economy of the USA is the most prosperous in the world, ever. Could it be that protecti…
I think that US States have a more limited ability to actually implement trade barriers because they don't have complete legislative freedom. Anything covered by an international treaty is off limits. Tarrifs are off limits and they generally don't have the funds to do massive subsidies.
Subsidies generally are pretty hard to implement because they're 'out of pocket' trade barriers which means the funds need to be raised via tax as opposed to tarrifs which are "in to pocket." Tax breaks are "leaky pocket," but a lot easier then actually paying out.
That's why treaties tend to be more lenient on subsidies.
Poor countries can barely do them. Poor countries/states can't afford them. Rich countires can only really afford them for small artisanal industries with the potential to grow into big, important tech industries. Like Film production and corn farming.