Odd Lots Ricardo Hausmann on What it Takes to Win a Trade War
57 snips
Jun 12, 2025 
Harvard Professor Ricardo Hausmann, a leading expert in economic complexity, returns to discuss the implications of trade wars, focusing on the U.S.-China dynamic. He explains how tariffs might stifle the U.S.'s ability to manufacture advanced goods. Hausmann uses the metaphor of trees and monkeys to explore how nations evolve through trade. He emphasizes the importance of specialization in economic growth and warns about the risks of simplifying complex processes that drive innovation. The conversation also touches on urban dynamics and the role of intangible assets in national security.
AI Snips
Chapters
Transcript
Episode notes
Trade Barriers Hinder Economic Complexity
- Trade barriers make it harder to access embodied knowledge needed for production.
- Tariffs protect some sectors but impair all industries using those inputs, reducing overall complexity.
Tariffs Not Ideal Industrial Policy
- Tariffs on mature industries often harm consumers and downstream industries without spurring learning.
- Industrial policy should target new sectors with spillovers and solve coordination problems, not just use tariffs.
City Size Reflects Industry Complexity
- Complex industries needing diverse talent cluster in large cities.
- Industries requiring less diversity locate in smaller cities due to land and labor needs.