Times are tough and inflation is rising. In the US, this has led for calls for President Joe Biden to lift or lower Trump-era tariffs on certain Chinese imports. The Treasury secretary, Janet Yellen, has said that some “reductions may be warranted”. But, as she and many other economists acknowledge, tariffs targeting a mere 3.6 per cent of the US economy are hardly a panacea for inflation. Indeed, the US-China tariffs distract from the real trade tug of war: global competitiveness in key industries.

Some new numbers from the Hamilton Center on Industrial Strategy shed light on this. Its index tallied national change in global share of output in seven key industries (pharmaceuticals, chemicals, electrical equipment, machinery, cars, other transport, computers and electronics, and information technology) across 10 countries between 1995 and 2018 (the last year for which OECD data were available). It found that while America remained strong in areas such as pharma, software and non-auto transport (which was mostly about Boeing), its performance in the other sectors was “weak and declining” when measured by both global market share and the size-adjusted global average. The US now ranks 6 per cent below that average.

This is a huge problem since these types of advanced manufacturing industries make up the majority of business R&D and also drive national productivity growth and investment. No wonder other countries, from Germany (which has a share of advanced industry 74 per cent above the global average), to Japan (43 per cent above), China (34 per cent), South Korea and Taiwan have all opted to protect such industries in ways the US does not. They have done this not with wasteful subsidies or failed policies such as, say, import substitution, but by putting the laser focus of both the public and private sectors on high-growth industries at crucial times, in ways that the markets (which look for short-term gains, particularly in countries such as the US and UK) aren’t always incentivised to do.