Supply Chain Resource Tracking: An Alternative to Tariffs For Managing Resource Dependence on Foreign Adversaries
Originally published on Botsfordism Substack on December 27, 2024.
How to do the least amount of damage to our economy while preventing reliance on foreign adversaries.
Introduction
The modern global economy requires more advanced mechanisms than traditional tariffs for managing strategic resource dependencies. While tariffs have historically protected domestic industries in adversarial trade relationships, they represent an obsolete approach given today’s complex supply chains and tracking technology. The author proposes a blockchain-based resource tracking system building on “Free-Market Ecology” concepts to create a nuanced international trade management approach.
Theoretical Framework
Limitations of Traditional Tariffs
Traditional tariffs function as blunt economic instruments creating market inefficiencies through indiscriminate application. When applied to strategic resources like rare earth elements, tariffs fail distinguishing between critical and non-critical uses, producing suboptimal market outcomes.
Resource Tracking Alternative
The proposed system implements a blockchain-based tracking mechanism fundamentally reimagining strategic resource flow management. Rather than applying broad price penalties, this system creates transparent supply chain accountability while enabling differentiated treatment based on end-use.
Implementation Framework
System Architecture
The system operates through interconnected balance sheets, each serving specific roles in tracking and managing strategic resources. Licensed importers must record all incoming strategic materials on blockchain-based balance sheets, creating immutable resource flow trails from domestic entry.
Market Segmentation and Price Discovery
Defense contractors and strategic users access protected supply chains with verified domestic or allied sources, while civilian manufacturers continue accessing international markets under monitored conditions. This segmentation prevents competition between strategic and non-strategic users from distorting either market.
System Benefits
The system’s precision targeting represents significant advancement over traditional tariffs. Rather than indiscriminately affecting entire goods categories, resource tracking allows granular control over strategic material flows. This precision extends to real-time dependency level monitoring, enabling early supply chain vulnerability warning and more effective strategic stockpile management.
Conclusion
This blockchain-based resource tracking system represents significant advancement over traditional tariffs, providing precise control while maintaining market efficiency. It demonstrates how modern technology enables sophisticated resource management strategies serving both economic and strategic objectives.