> Markets will drift towards efficiency without considering externalities. Markets will not drift towards strategic manufacturing capacity at a higher cost per unit produced without government intervention (subsidies, tariffs.)

Well, and why would we expect them to take that into account?

Btw, there are good and (mostly) bad ways to do these interventions. Tariffs are especially bad.

A lot of the discussion of these measures also treats all foreigners the same. Eg in practice a chip being produced in eg Canada is virtually as good for national security as one produced in the US. But acts like the 'CHIPS and Science Act' don't see it that way.