Economist Paul Krugman suggests that strategic trade policy aimed at establishing domestic firms in a dominant position in a global industry is a beggar-thy-neighbor policy that

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Paul Krugman suggests that strategic trade policy aimed at establishing domestic firms in a dominant position in a global industry is a beggar-thy-neighbor policy that boosts national income at the expense of other countries. Consequently, a country that uses this type of policy will probably draw retaliatory action. The resulting trade war would leave both countries worse off than if a free trade approach had been implemented to start. Krugman suggests that to avoid the disruptions a trade war would create, countries should instead help establish the rules of the game that minimize the use of trade-distorting subsidies.

Economist Paul Krugman Suggests That Strategic Trade Policy Aimed at Establishing