market power takes different forms. firms like NVIDIA or TSMC or ASML are have a great deal of market power as single firms. Apple as well, but less, the goods it uniquely provides admit more substitutes. 1/

but more commonly market power is an industry rather than firm characteristic. if there are tractably few major firms, market power is exercised by tacit coordination. major firms settle on similar strategies. 2/

if tariffs in the US leave international firms fearful of losing long-term share, they may try as the article suggests to pass incidence of the tariff to third countries. if there are a few dominant international firms, we may find they make similar choices. 3/

they will argue it’s because they face similar market constraints — eg British markets are price sensitive — but if they jointly perceive a greater interest in maintaining US markets access than competing with one another for share, they’ll also quietly converge and copycat. 4/

of course smaller, purely domestic players and upstarts may try to take share from the international oligopolists. but in many industries, multinational incumbents remain difficult to challenge. 5/

how well and how long tacit coordination in mutual benefit of large incumbents can last in any industry will depend on the particulars of the industry and, well, chance. 6/

but it is mistaken to imagine this kind of coordination cannot or will not occur, just as it’s mistaken to imagine it has no limits. 7/

market power is a continuum and its exercise a coordination challenge, but exercising market power and addressing those kinds of challenges is the very heart of real-life commerce. /fin