Gabriel — Of course you're right that there's a slippery slope. Any two jurisdictions whose governments make different policy choices implicitly favor or disfavor some actors over others, and could be said to engage in "subsidy" or "tariff", but going that far would rob all meaning of the words. Actually, the fact of ordinary policy difference may be a strong argument for free trade, as production can migrate to the most efficient jurisdiction given divergent policy preferences with unintended effects on the production of some goods and services. [If those effects were intentional, the issue becomes more contentious, whether it's desirable that trade undermine some policies and effectively limit options available to policymakers. Maybe yes (the "freshwater" view?), maybe no, maybe it depends.]

But I was trying to make a stronger point, that in fact many policies that are quite ordinary in the US don't affect interstate trade incidentally, but are structured and argued for in precisely the same terms as export subsidies in international commerce. US states give important industries all manner of tax breaks and outright credits, waive years of tax revenue and throw in free, expensive infrastructure to persuade a factory or firm to locate within its borders. Policymakers expressly justify these grants as means of preventing firms, industries, jobs, whatever from moving to other states. The alleged export subsidy isn't an accident of unrelated policy — it looks, feels, and smells like giveaways to "champion firms" and "critical industries" in international trade. We don't notice this much only because we're used to it. At worst it's tolerated like "pork", and at best it's considered a beneficial form of competition. (BTW, I don't have a general view of whether this is good or bad — while these subsidies always gives rent to rent seekers, they do occasionally seem to be worth the cost to paying localities. But what about localities that "lose"? It depends...)

I didn't mean to say there is "no real free trade" within the US, except in the trivial sense that there can be no "textbook" free trade anywhere, the real world is too distorted. Trade freedom is a matter of degree, and qualitatively, intra-US trade is much freer than most international trade. But, it is worth noting that the variant of relatively free trade within the US involves a great deal of strategic subsidy by states and localities, and if that variant is to be held up as a successful model, the fact of that subsidy should be acknowledged, and arguably imitated.

"[R]easons that elude Econ 101 are usually very bad reasons." Here, alas, we diverge. I like Econ-101-ishness too. Much of the art of the world may involve creating the preconditions under which Econ 101 reasoning mostly holds. But I don't think those preconditions don't create themselves, and we have to deal with that. I think most success stories involve large deviations from simple economic reasoning. As time goes by, I am ever more chastened by a fictionalized long-dead man who talked to ghosts. "There are more things in heaven and earth... Than are dreamt of in your philosophy." That applied to libertarian-ish me. I'm sure someday it'll apply to whatever me I am now.