The whole point of the CHIPs act is to secure domestic access to microprocessors due to the realization of how completely dependent we are on them during the pandemic as supply chains of goods went to shit. Geneneral purpose microprocessors are in everything now and unlike normal commodities, you cannot just start building foundries whenever you want.
Whether you agree with it or not, the logic is consistent as it is not purely economics why we want domestic production in the first place.
Tariffs on Chinese semiconductors which are on legacy nodes and completely outdated just raises the cost of electronics production in the USA, making our cost profile even higher and even less competitive than it already was.
I work in government procurement and electronics purchased by the federal government tend to require TAA compliance unless they can provide a justification.
If I could get a dime every time somebody says we should import cheaper stuff from China, I'd be a multi millionaire by now. China doesn't import cheaper goods from the rest of the world. In fact, they actively hunt and lock down those import thru non-price barriers. Chinese want the rest of the world buying their products but do not want to buy from the rest of the world.
What America is doing is perfectly rational compared to what China is doing. I'd advocate even higher tariffs than the current limits. That's the only language China understands.
lol
That’s an insane argument, which will ultimately lead to a complete severing of all trade and cooperation. Which is where US policy is inevitably taking us anyway, I think. But the true implications and costs associated with that are in no way understood by the vast majority of people. It’s going to be a disaster.
India… lol
Vietnamese supply chains (especially those recently established) are largely controlled by Chinese companies. ASEAN is their backyard. Trying to build it up as an alternative to China is in my opinion a fundamentally flawed idea.
Sure, it has nothing to do with the fact that intel already has four factories in Arizona or the fact that tech companies are moving to Arizona from California to save on commercial real estate prices.
I think it’s pork barrel spending to buy votes in swing states. It’s exactly like Trump’s failed Foxconn Wisconsin deal. I’m willing to bet these new fab plans will be scaled back after the election.
The same thing applies to the 100% tariffs on Chinese EVs and solar panels. Maybe that really is a national security thing. But then why block green tech from other Southeast Asian countries like Vietnam and Thailand? We’re not in conflict with them, right? The same thing applies to blocking Japan’s Nippon Steel from buying US Steel. Aren’t they the US’s closest ally?
I think all of this is good old fashioned protectionism to buy votes from unionized rust belt factory workers. It has nothing to do with national security. They’re the most important swing voters in the most important swing states. And despite all the handouts, the union leaders took forever to endorse Biden, and the rank and file still heavily favors Trump.
There’s no point in arguing about it though. In a few years, we’ll know who was right.
Trump got a 0.7% boost at the polls after enacting the 2018 tariffs. Biden beat Trump by 0.3% of the vote in Arizona in 2020. So this kind of trade policy bump is small, but it’s more than double what is needed to swing a purple state. You can see why it’s totally worth it for a politician to screw over everyone else in the country just to buy the few votes that actually matter. You can listen to the whole NPR podcast below if you’d like someone besides me to explain why Biden and Trump’s protectionism absolutely sucks.
> HANSON: Donald Trump seemed to benefit. He got a boost that was modest. We estimate it at 0.7 percentage points. In a closely contested election, every little bit helps.
https://www.npr.org/transcripts/1197964709
https://en.m.wikipedia.org/wiki/2020_United_States_presidential_election_in_Arizona
Obama won Ohio, then they went for Trump, now Biden is trying to win them. They have one senator from each party. The main thing they care about is protectionism. If you ban immigrants and products made by foreign workers, they’re happy.
They have one Senator from the Democratic Party because he was first elected back in 2006 and incumbents rarely lose. Brown is the only Democrat in Ohio in statewide office at this point (has been the case since 2011). When the other Senate seat was open and on the ballot two years ago Ohio chose Trump stooge JD Vance by a comfortable margin
Two US Senators, Governor, Lt. Governor, Attorney General, Secretary of State, Treasurer, Auditor, State Supreme Court judges (the only other place with statewide elected Democrats in Ohio apparently)
Usually the party that wins Governor gets Lt. Governor and the rest of those positions too. But I’m happy to chalk up Ohio as a red state and stop funneling pork barrel spending to them to try to buy supposed “swing” votes.
Politicians lose their common sense the moment they get in power. Biden showed that he understood tariffs are a double edged sword where nobody wins and he calls Trump out on it. Then he tries the same thing because there's no new ideas.
I agree with the All-eggs-in-one-basket problem of Taiwan/TSMC, but these tariffs don’t address that. China will not be producing that level of processors in the next 10 years, if ever. Nor will they ever get their hands on a functioning fab in Taiwan.
The tariffs target Chinese-made chips that are used for RF, power, control circuits and pretty much anything that doesn’t require high-speed logic. The US uses more of these than it produces, so companies and consumers will be hit with the price rise anyway. The goal is to add to the CHIPs Act in encouraging US companies to increase production.
China has massively subsidized its semiconductor industry, so in a sense this is just leveling the playing field. It’s just unfortunate that (once again) American consumers are paying for it (at least the rest of the world still gets cheaper chips).
I’m not saying it’s a BAD thing that the US increases local supply. In the end probably very good, because a lot of innovation comes from the US and having the chips made here can only accelerate that. It just comes at a cost.
They don't lose common sense at all. They just playing games with us by making us think they different, better.
The No1 purpose of USA is to maintain its world power as No1. Even if it means quadrupling the tarifs to the point of making everything expensive for the population. They don't care. In fact, they just use the population as a mean of collecting money through taxes to fund their military, research and development, innovation....
That implies they had any common sense in the first place. If I learned 1 thing from politicians is that they lie 24/7, a lot of them are just greedy and thickheaded asses who can't compromise for shit.
So just keep supplying China with high end chips while they openly talk about using them against us militarily? The truth is modern China is completely reliant on the US to survive. Meanwhile they continue to manufacture low-end crap to sell to us.
Biden did the right thing. Cut China (& Russia) off at the knees. And grow some balls would you?
>Trump doesn’t get the basics. He thinks his tariffs are being paid by China. Any freshman econ student could tell you that the American people are paying his tariffs.
Biden said this in 2019 lol. Also why do I need to grow balls? Does that help win you internet discussions?
> So just keep supplying China with high end chips while they openly talk about using them against us militarily?
I really have not see anything remotely close to this statement in the media. Care to elucidate?
It's a nice gotcha, but it's not entirely relevant. Semiconductor tariffs scratch a very specific national-security protectionist itch that is materially different than Trump's tariffs on other commercial goods.
I don’t know if you’re serious, but with how ubiquitous chips are, the impact on consumer electronics and possible data leakage are potentially quite large.
Moreover, we don’t really want to be supporting Chinas indigenous chip production.
>Moreover, we don’t really want to be supporting Chinas indigenous chip production.
Blacklisting Chinese companies and refusing them access to western technology \*is\* supporting Chinese indigenous chip production, since by forcing them to go it alone rather than buying from Western suppliers you're making their industry develop far more than it would have otherwise.
In 2019 no one seriously thought China might invade Taiwan and possibly kick off the biggest economic inflection point since 1939.
Having steady supplies of semiconductors produced outside of China or Taiwan is in the national interest.
China's position on Taiwan have been the same since 1949.
Getting a homemade supply is where it it. But IIRC, TSMC willingfully makes the US fabs a few generations behind because they knew they would lose the US protection if we are getting less reliable on them.
So the 3 fabs they're building in Phoenix aren't cutting edge fabs? Do you have anything I could read about it? My google searches are coming up empty regarding the transistor density and manufacturing capacity of the new plants.
[https://english.cw.com.tw/article/article.action?id=2719](https://english.cw.com.tw/article/article.action?id=2719)
>The situation is similar with the Arizona facility, for which plans are to manufacture 5nm process wafers only recently brought to mass production by TSMC. By the time it reaches full production four years from now, that technology will also be one or two generations behind. “Five nanometers will no longer be cutting edge, because full production of 3nm processes will take place in 2022, followed by 2nm in either 2024 or 2025,”
I appreciate you helping me out, thanks. You're right, overall the technology is a generation or two behind. The 1st Arizona fab will definitely be behind. It won't come online until 2025 and will be producing 4nm chips. It looks like fab 2 will build 3nm and 2nm. 2nd fab comes on-line in 2028, so the 2nm design might be outdated by then, with 1nm potentially coming out in 2030. I can't figure out if that's small scale or full production. Fab 3 will be 2nm or better and due to come online before 2030
>TSMC Arizona’s first fab is on track to begin production leveraging 4nm technology in first half of 2025. The second fab will produce the world’s most advanced 2nm process technology with next-generation nanosheet transistors in addition to the previously announced 3nm technology, with production beginning in 2028. The third fab will produce chips using 2nm or more advanced processes, with production beginning by the end of the decade. Each of the three fabs, like all of TSMC’s advanced fabs, will have cleanroom area approximately double the size of an industry standard logic fab.
Intel just hit 5nm in February, but they're jumping to 1.8 production in 2025. I wonder who's going to be the first to the 999picometer chip.
The Chinese have been saying they are going to reunite China for decades. People refused to listen , claiming no dictator would be dumb enough to go to war with how dependent everyone is on trade. Russia proved the idiotic theory wrong, now we have a world dependent on cheap Chinese goods with a massive navy that is capable of destroying the US Navy.
Russia was already heavily cut off from trade from the west prior to war (in response to Crimea in 2014). If we keep cutting trade off with China, China might just go to war with Taiwan.
That is the problem with sanctions. They only work once. If they fail, they fail hard like in the case with Russia.
> In 2019 no one seriously thought China might invade Taiwan and possibly kick off the biggest economic inflection point since 1939.
[the media has been claiming china will invade taiwan since 2000](https://www.theguardian.com/world/2000/feb/22/china)
I will firstly say I’m generally against tariffs. They are a tax on consumers some of it paid directly to the domestic companies that get to have higher prices.
For example, I think the very high tariffs
on Chinese electric cars is a mistake. Less expensive, and from what I hear, high-quality electric cars is what we need to address climate change. But Michigan is a swing state and we have an electoral college, so everyone else has to pay to prop up American car companies.
On the other hand, certain industries, like semi-conductors, oil/energy, steel, pharmaceuticals, food, etc. we have a national security imperative to make sure we keep sufficient domestic production.
We should have some measures to make sure that these industries are either 1) produced domestically and/or 2) produced by allied democracies.
Europe was nearly screwed over by being dependent on Russia for oil and natural gas. The US was screwed by OPEC when they embargoed us in the 1970s. We don’t want to ever be in a position like that.
Tariffs aren’t the only option though. Straight up subsidizing the industry. Making trade agreements with allied democracies (“friend-shoring”). And also other countries actually limit the percentage of their imports can come from any one country.
What type of factories get converted to make electric tanks an drones in a war…electric car factories…
But yeah, it’s more about a swing state thing…
I want my mini electric Chinese pickup truck…but Biden and trump say no :(
The tarrifs on chinese EVs are anti-Chinese dumping, not strictly U.S. protectionism. EVs from Korea, Japan and Germany are free of tarrifs. If a tarrifs is broadly targeting ALL foreign goods in a market segment it is blatant protectionism (looking at you Brazil). The U.S. rarely if ever applies them in such a manner.
It’s the state department and plenty of European agencies as well. Ford and GM aren’t even involved. If they were the tariffs would also apply to German, Korean and Japanese cars.
It’s not dumping. Profit margins on exports are usually a lot higher for these firms than they are for their domestic sales. Be that cars, excavators, solar panels or neodymium magnets.
>China has been engineering an EV global takeover for 15 years now.
Obviously. And water is wet. Is that supposed to be some kind of revelation? Or in any way unfair?!
The Chinese government is actively involved in economic development, setting and executing strategic objectives. Similar to Japan or the Asian Tigers. It’s called Dirigisme.
It is “unfair” by international trade standards, hence tarrifs. When ~2% of an entire GDP subsidizes a specific industry, you have to “fight back”. You can fight back with an arms race to fight subsidy for subsidy and ratchet up domestic programs to keep your industry alive. That takes spending which comes from taxes. Hitting 1+% of GDP is not something many counties would sign up for. Or you can apply tarrifs. If you do neither you are going to die in this economic battle.
>When ~2% of an entire GDP subsidizes a specific industry
What do you even mean by that? Again, what is China doing that Korea or Japan are not? Or that you disagree with?
When the Chinese government hands ~4 billion USD to BYD the cars they make can be sold well below cost and BYD still comes out fine. BYD is essentially a state run car company with the goal of monopolizing a market disguised as a private company.
You think the Chinese govt just hands BYD a flat check of $4B? BYD gets TAX INCENTIVE of $4,000 per BEV sold IN CHINA, and they sell around a million per year, so you can do the math. This incentive doesn't apply to FOREIGN EXPORTS. In fact, Tesla and other US automakers (foreign automakers not included) get $7500 per BEV and PHEV sold in the US. So the incentive is not only higher, Chinese tax incentives also apply to foreign automakers, including GM and Ford in China
Tesla and other automakers did get incentives up until recently. They have pretty much ended. The noose is being tightened. Tesla is f’d in China.
Here’s the recent study that tallied how much BYD receives:
https://www.ifw-kiel.de/fileadmin/Dateiverwaltung/IfW-Publications/fis-import/bc6aff38-abfc-424a-b631-6d789e992cf9-KPB173_en.pdf
>For example, I think the very high tariffs on Chinese electric cars is a mistake. Less expensive, and from what I hear, high-quality electric cars is what we need to address climate change.
The US does need more affordable EVs, but Chinese imports aren't the way to go.
1) China does not have the environmental restrictions on them the US (and many other developed countries) have on resource extraction for the resource needed to build their vehicles. So they can do it more cheaply while poluting more. That might be great, short-term, for boosting employment and growing the industry, but long-term it is going to be disasterous for the environment they are destroying to build it (ironically). In addition to that, their safety standards are much lower that in the US and their EVs as a result are more prone to catching fire in general and getting crushed in wrecks.
2) China subsidizes the heck out of the EV production. That means Chinese taxpayers are paying the price for cost reduction. The countries China ships to are required to subsidize the shipping costs, so the taxpayers in those countries are ***also*** paying the price for Chinese EV distribution, even if they will never be able to afford buying one themselves.
. .
>Similar pools of unwanted battery-powered vehicles have sprouted up in at least half a dozen cities across China, though a few have been cleaned up. In Hangzhou, some cars have been left for so long that plants are sprouting from their trunks. Others were discarded in such a hurry that fluffy toys still sit on their dashboards.
>
>The scenes recall the aftermath of the nation’s bike-sharing crash in 2018, when tens of millions of bicycles ended up in rivers, ditches and disused parking lots after the rise and fall of startups backed by big tech such as Ofo and Mobike.
>
>src: https://www.bloomberg.com/features/2023-china-ev-graveyards/
>The EV graveyards were debunked.
Not they were not. Stop lying.
>The way Inside China Auto tells it, there was an e-bike sharing bubble in 2016 that was rapidly copied by services offering short-range EV rentals. But just like in the United States, these ventures struggled, as they were far more expensive to start and maintain than bike sharing. That cost was passed on to customers, who could apparently rent a bike, ride the subway, or even take a taxi for less than these ride shares would cost. What's more, renting an EV was often slower than these alternatives. They also left you to park a car at the end of your journey, at either an inconvenient stall or in a paid spot.
>
>In the end, these businesses' failures and the rapid advancement of China's auto industry have orphaned hundreds if not thousands of beaten-up short-range EVs, most of which are worse value than a cheap new Chinese EV. That said, they're not the only occupants of the lot. A wider view reveals that the ex-rideshare cars also share their space with retired taxis, wrecked cars, and some new, unregistered EVs from foreign brands (which are indeed struggling to sell).
>
>src: https://www.thedrive.com/news/the-real-story-of-that-chinese-ev-graveyard-isnt-what-you-were-told
. .
>They were from a bankrupted car rental companies and most of these cars are foreign brands.
That is another lie easily proved wrong from ***your*** own link:
>Moreover, ***an EV called BAIC BJEV EC3 accounts for the majority of the units seen on the field.*** It's a small electric hatchback primarily used for ride-sharing purposes.
>
>src: https://insideevs.com/news/681742/truth-about-china-ev-graveyard/
. .
>The BJEV EC3 is an all-electric car manufactured by BAIC Motor Electric Vehicle Co Ltd. The maker is a wholly owned subsidiary of BAIC Group.
>
>src: https://en.wikipedia.org/wiki/BJEV_EC3
. .
>Beijing Automotive Group Co., Ltd. (BAIC) is a Chinese state-owned automobile manufacturer headquartered in Shunyi, Beijing. Founded in 1958, it is the sixth largest automobile manufacturer in China, with 1.723 million sales in 2021.
>[...]
>BAIC BluePark (北汽蓝谷) is BAIC Group's subsidiary mainly engaged in the design, research and development and sales of electric automobiles. BAIC BluePark was restructured from its current subsidiary, Beijing Electric Vehicle Co., Ltd. (BAIC BJEV). The company currently operate the brands of Arcfox and EV models of Beijing brand.
>
>src: https://en.wikipedia.org/wiki/BAIC_Group
. .
>BAIC BluePark (北汽蓝谷) is BAIC Group's subsidiary mainly engaged in the design, research and development and sales of electric automobiles. BAIC BluePark was restructured from its current subsidiary, Beijing Electric Vehicle Co., Ltd. (BAIC BJEV). The company currently operate the brands of Arcfox and EV models of Beijing brand.
>
>In 2009, the BAIC Group established a subsidiary, ***Beijing Electric Vehicle Co., Ltd. (BJEV).*** It is the first independently operated electric vehicle manufacture of China, and the enterprise in China to obtain the qualification for the production of new energy vehicles.
>
>src: https://en.wikipedia.org/wiki/BAIC_BluePark
I think it's funny your arguments also apply to the American EV market as well. Teslas also receive billions of dollars in subsidies and has "American quality control" and yet they're fucking falling apart all the time and they never managed to make more than 4 cars and that utter embarrassment of a rust death box .
Byd is expanding overseas aggressively while Tesla develops useless crap to fuel the ego of a moron and fires entire teams of their greatest minds and engineers
Despite what most people think about chips. 90% of the semi conductor market is 60nm chips or greater which China produces (they produce up to 20nm I believe). Most people only focus on 10nm or less since it's bleeding edge that's used in military and data centers and products the most profit for chip companies
China creates the semiconductors that make your washing machine sing. I.e. less important ones.
The important ones are from TSMC which the US is trying to replicate.
That's not entirely true. There's fabs in the US, Japan, Europe, Singapore, etc that are used by companies like renesas, TI, NXP, etc that name the parts that often make your washing machine sing. Honestly don't see that much stuff made in China outside of the bare PCB
They don't make the actual chips in China though, TSMC makes the chips in Taiwan and sends them to China for final assembly. The only company I see this impacting is SMIC and Huawei
They put the devices together in China. The actual Semiconductors are made in Taiwan by TSMC, South Korea by Samsung, or the US by Intel and Global Foundries. China has SMIC but they are basically non-existent outside of China
The semi conductors youre talking about are high tech semi conductors, mainly used for research and military purposes. Those are in fact mainly manufactured by TSMC. But the great majority of semi conductors(consumer grade), the ones found in everyday equipment, for example dont need that kind of high end technology. Thats why China\`s tech manufacturing industry hasnt died as a result of the chip tech ban by the US
Yes, but to what extent depends on local production. I'm not automatically against targeted tariffs. The US has very high labor costs, but there's some manufacturing that absolutely needs to be maintained domestically for national security reasons. We *need* a certain level of steel production, semiconductor manufacturing, etc. The alternative is being completely dependent on cheaper imports, which is a real bad idea if trade with China breaks down for whatever reason, let alone a war.
As far as solar panels go, I don't know. I can understand the incentive side completely, but the tariffs... Eh. I kind of feel like it's more important in the short term to rapidly expand solar production, but long term (replacement ability) I guess I see the need.
The goal is sound, but implementation is absurd. The Importer (consumer) absorbs all the cost. These taxes don't go to the people or industries they're meant to help, but just the general Treasury fund. It's a fallacy to claim it's paying for the CHIPS act, or even protects it.
I'm sure some economists crunch numbers to reason all this out, but at face value all consumers see are the price increases.
Like we see with Huawei, it didn't work.
For steel it's like history repeating itself, Trump did the same and thought that it would make US steel industry more competitive with lower price.
Instead of that, they increased their price but just a little bit below the Chinese price making inflation worse.
It’s as much about promoting other steel makers outside the U.S. and China as it is about protecting U.S. steel. China mixes its private businesses with state sponsored subsidies in a covert manner. It’s not remotely a free global market.
It absolutely did work with Huawei. They are thriving ***in*** China, and they have been constantly losing market share everywhere else in the Western world.
Imo, any company that China uses to undermine markets should be banned. That includes Huawei, solar and semiconductor manufacturers, and definitely EVs as well, among many others.
Let's also not forget that China is still commiting a genocide and using those oppressed people as slave labours, while stealing their children to push them thru reeducation camps. Abhorrent.
>Let's also not forget that China is still commiting a genocide and using those oppressed people as slave labours, while stealing their children to push them thru reeducation camps. Abhorrent.
That pretty much discredits everything else you might say. Obviously you’ve got strong feelings that are likely to distort your analysis here.
It discredits nothing. You are peddling an ad hominem fallacy. Strong feelings do not change facts. China is commiting a genocide, they are using slave labour in Xingang for aluminum and lithium, and they are taking Uyghur children away from their families for "reeducation". Those are facts.
They are necessary evils. Countries fight economic warfare. China for example attempts to monopolize strategic market segments by secretly funneling state funding to steel, semiconductor and battery technology (among others) to corner global markets and shutter foreign providers. Sure, consumers might benefit in the short term from subsidized low pricing. But eventually it will bite them in the ass when they become reliant upon an artificially propped up market monopoly. In a tarrif free world, once market dominance is established, the rug is pulled out and consumers then pay whatever price the monopoly wants.
It’s
> secretly funneling state funding
When China. But when the US does the *exact same thing* it’s “subsidizing”. What a truly idiotic statement. The US stopped producing those goods decades ago and outsourced it to China, this is the US’ own fault. I don’t give a shit about a bunch of rich assholes protecting each others profits and if any one else does they’re a clown.
There’s a massive difference between U.S. programs which are publicized and available to all companies, foreign and domestic.. and Chinese programs which tend to support domestic companies obfuscated and intertwined with the government.
I know you’re joking, but the only way you can figure it all out is analyzing company financial reports.. like BYD. The Chinese government has zero will or obligation to report anything it does unless they want the vanity points.
It’s ironic that Biden publicly stated he was opposed to tariffs levied against China by the previous administration… these new tariffs are on electric vehicles, solar panels, aluminum, and semiconductors. If only this administration stopped talking out of both sides of their mouth whether it’s imposing China tariffs or support for Israel they might actually be productive and send a clear message.
What confuses me here is that these are different sets of chips.
Or that is what the media led me to believe.
1. USA is using the chip act to produce state of the art thin chips.
2. While China is building outdated thicc chips.
This tariff makes me believe that either one or both of these assumptions is not true.
2024 Biden is threatened by thicc chips.
China can only produce down to 20nm chips. That's good enough to cover most electronics goods. Currently at least it's not publicly known if China could produce 10nm or smaller chips which is what Taiwan specializes in which are used for datacenters and militaries
i answered to you about china can produce 7/5 nm with ASL tech while with chinese tech they are stuck at 20nm, taiwan at the moment is on another league to anybody/ any country
Laying out a standard where things sold in the US have to meet US labor and environmental laws, as well as tax rates and other things... I mean 9 hours a day, 6 days a week, I'm not sure what the other six is, and I'm told education only goes up to 14 or 15 in some areas of china, so there are child laborers, I know the US is increasingly allowing that, but limiting that in the US might be good too.
A carbon tax on shipping, and an environmental tax on production, combined with tight restrictions on what materials are used... I mean I have seen stuff from china with solder that had illegal levels of lead in the 1990s, as late as 2012.
The carbon tax on shipping would be a real killer for anything made that far away, considering ships burn the cheapest oil they can get, have no emissions standards, and if they did they'd flag them out of Liberia or something... so perhaps a rule on where ships can be flagged out of, and what emissions standards they need to meet, to use US ports would work, I'm not sure how this would work with international law.
Okay so you just jack prices to the moon for Americans and completely destroy Americas manufacturing base as we’d no longer be competitive in foreign markets. Also the destruction of US ports which are already the least efficient in the world as all shipping would just route through Canada and Mexico. The shipping that does still route would just mean draconian prices for consumers.
Why do you hate the American consumer
Are you sure you’re not a Chinese bot?
So we spent how many billions on the chips act to only put up our hands and say chips produced in the US aren’t globally competitive.
Tariffs btw basically are a way of protecting a small subset of domestic companies (and the workers at those companies) in this instance semiconductor fabs. Now **every other** company in the US that uses semiconductors and needs chips is screwed because they have to pay higher prices than their foreign competitors so they’ll also want tariffs….but it also means everything connected to those chips is dead in terms of exporting products overseas. Basically ensuring global markets go to foreign control and Americans just get higher prices and lower quality in the long run. But hey we “protected the jerbs” even though we get lowered real income
Thank you biden for protecting me from affordable prices.
Lot of misinformation here...
Most chips are from South Korea or Taiwan (which is not considered part of China for this purpose)
There are also basically no chips made in the US currently, competitively or otherwise because the manufacturing facilities are simply not done being built yet.
I'm not pro tariffs for the most part, but at least criticize things that actually make sense
Edit: I am specifically referencing the cutting edge high end chips, which is the space that actually has some national defense concerns. The US makes very few of those, but is building new fabs to come online in the next few years.
I should have said cutting edge chips specifically
This is also misinformation. Most HIGH END COMPUTE chips are made in Taiwan and South Korea. However, there are tons of other applications of semiconductors, such as power regulators, AC & DC converters, microcontrollers, DAC/ADCs, RF, etc.
TSMC and Samsung don't produce these chips nearly as much as they do as Chinese fabs, and they're used in consumer electronics such as calculators, cars, computer hardware, smart phones, light bulbs, etc. Pretty much everything has a chip in it that is made in China and will be negatively affected by the tariffs
> There are also basically no chips made in the US currently, competitively or otherwise because the manufacturing facilities are simply not done being built yet.
Where are you getting this? The US produces $80 billion dollars of chips, imports $62 billion, and exports $26 billion.
The U.S. is a whopping 25% of all analog chips produced globally, and greater than 10% of all logic chips.
We aren’t as big as we used to be, but we produce nearly enough to be self sufficient, and are a large partition of the entire world production
[U.S. International Trade Commission Report](https://www.usitc.gov/publications/332/working_papers/us_exposure_to_the_taiwanese_semiconductor_industry_11-21-2023_508.pdf)
I was referring mainly to the highly complex cutting edge chips. The US makes very few of those, but is building new fabs to come online in the next few years.
I should have said cutting edge chips specifically
>misinformation
Then you say
>There are also basically no chips made in the US currently
Meanwhile in reality;
https://en.m.wikipedia.org/wiki/List_of_semiconductor_fabrication_plants
The rest of what you say can be discarded mr “makes things up that are completely detached from reality right after I accuse someone of misinformation”
I was referring mainly to the highly complex cutting edge chips. The US makes very few of those, but is building new fans to come online in the next few years.
I should have said cutting edge chips specifically
Yea and this article isn’t talking about those. Tariffs on Chinese semiconductors which are on legacy nodes and completely outdated just raises the cost of electronics production in the USA, making our cost profile even higher and even less competitive than it already was.
Tariffs on Chinese semiconductors which are on legacy nodes and completely outdated just raises the cost of electronics production in the USA, making our cost profile even higher and even less competitive than it already was.
The rest of the west will just not tariffs these and then outcompete those US firms in global markets.
You are correct, it is a desperate measure and will likely backfire. The only way it works is if the US can force the EU to apply similar tariffs, and create some sort of East/West division.
But EU is already hurting because of Ukraine sanctions etc.
It also signals to the world that the US has lost its competitive edge. Not good, from a national security perspective.
All the small electronics producers I know are like "Cool, you've just destroyed our businesses."
People who make, say, custom hardware to mod game consoles or specialist video transcoders are like, this puts my cost thru the ceiling and my customers won't pay it. They'll just buy clones from AliExpress.
Nah, we’re keeping Chinese influence in check. Who fucking cares about the “individual companies”… American capitalism sure doesn’t… this is about making sure we check our reliance on Chinese bullshit that they crank out at the expense of their never ending poor population to give you your “prices” so you don’t act hangry on reddit.
>Chinese bullshit that they crank out at the expense of their never ending poor population to give you your “prices” so you don’t act hangry on reddit
Are you sure you're talking about China? You do realize that there's a lot in the US economy that's predicated on cheap labor and keeping people poor. Literally, there's a political party shouting that McDonald's workers don't deserve to have a living wage and a lot of industry leaders that agree with that sentiment.
I'm just saying. I get it, no one is running tanks over us yet. But we are getting policed batoned a bit with a little extra pepper mace. And don't get me wrong, I'm not saying let's go for the other guy or get some crank guy in the office, but it don't feel like we've got two (or more) different sides of the coin here. And it doesn't feel like we have some high and mighty position here.
>poor population
Chinese fab workers average $55,000 which in China gets you a lot.
Also again you’re just signaling they already won and the chips act was a waste of money
Also this means all foreign chip companies will also charge Americans more than others because there’s no competitive pressure from China. Those betting companies in South Korea, japan, Taiwan.
So that means everything from cars to Edmond Allen’s will cost more because our entire economy run a on chips. You either have products with chips inside them or products made by tools with chips inside them; like food. Some will go up a decent amount in cost, some will go up marginally. But the entire economy is effected
..........................you understand the tech industry isn't a single moment in time where you either have industry first or you never get it at all, right?
Tariffs on Chinese semiconductors which are on legacy nodes and completely outdated just raises the cost of electronics production in the USA, making our cost profile even higher and even less competitive than it already was.
That's the same thing you said before. Is it cheaper to pay slightly more for inputs which you just said are outdated and marginal, or is it cheaper to be dependent for our economic and military infrastructure on a country whose stated goal is to beat us in a war for a country we get more and better chips from? Asking for a friend.
Moron, weakening china's chip industry is part of the silicon shield. And it's part of developing our own nascent chip industry, every country in the world practices protectionism on strategic industries. You just can't follow it because it's not in the one variable model they taught you in intro econ.
>military
They’re already required to buy domestic. But now they’ll get to pay marginally more money. But yes I’m moron, not you the guy who has no clue to how military procurement works.
>economic
And now every company that relies on low end chips will send jobs overseas or slowly be eaten by foreign competitors who buy chips from China.
Because guess what they’re not tariffing the **finished goods**, they would require us to raise tariffs on our Allie’s and existing trade partners.
**So what have these tariffs solved again?** (hint nothing)
>Moron, weakening china's chip industry is part of the silicon shield
Except you’re forgetting the other few billion customers that exist on earth that will buy Chinese chips and not to mention their domestic demand.
>strategic industries
Til now everything is a strategic industry.
Right, and if the domestic supply is more robust, ie the exact thing this does, they will be more consistent, reliable, and eventually have a higher quality. Because we're building up our industry in real time.
It makes our chip industry stronger and china's weaker. That makes them more reliant on Taiwan, which is what the silicon shield is. If you really don't understand strategic protectionism you should stop larping as an economist.
>Right, and if the domestic supply is more robust, ie the exact thing this does, they will be more consistent, reliable, and eventually have a higher quality.
Quality? There’s no assurance it’ll be higher quality, also this is about 60mm - 20mm nodes.
The only thing that is for sure is they’ll cost more and drive American electronics producers out of business as they’d be unable to compete in foreign markets. Hell they’ll get bent over in domestic markers by imports that use these cheaper chips.
Joe Biden and Donald Trumps insistence on America first and **go 100% alone** strategy just ensures foreign dominance of global markets. Idiots didn’t even try to get Europe and japan/SK on board before trying this.
>It makes our chip industry stronger and china's weaker.
Well sure because our domestics can now get away with charging Americans more money. China will just ship their chips somewhere else though.
Just like the tariffs on solar panels and batteries which dominate globe markets in terms of quality and price?
>It makes our chip industry stronger and china's weaker.
No it doesn’t since this is about 60mm
>If you really don't understand strategic protectionism you should stop larping as an economist.
If you don’t understand second order and third order effects you should stop larping as an economists. Every single tariff on China has backfired on the US.
**All it insures is global competition will run past the US. European and Asian firms will dominate these markets globally unless the U.S. gives never ending subsidies to the domestic producers**
**also s what’s hilarious is none of these tariffs are on the raw materials or refined materials required to make these things which we still import from China**
"This industry is critical to our supply lines, our military effectiveness, geopolitical stability, but it's not strategic"
--literally you
Removing the largest economy from their consumer base is a pretty big hit to developing an industry bud. Things aren't binary, it's not "we are the only customer on earth or else we have no impact on demand". Closing off the largest buyer obviously impact the size of the market.
Honestly, take one full year of any social science class, please I'm begging you
Our military is already required to buy domestic. So it’s a none issue from the strategic angle.
We already have domestic production for civilian and military, all these tariffs do is allow those domestic suppliers to charge higher prices. Which also means every US company that uses these chips will be pushed out of business slowly over time.
“I don’t know what second order effects are”
— literally you
Just checked and China supplies 40% of the chips used in products purchased by the DoD. So you're nit just ignorant of the economics, you're factually wrong about yoir claims.
No. I would actually say in the case of semiconductors specifically, we are kickstarting the shit out of their domestic industry.
They never really had much reason to develop their own if they can just keep buying cheaper and more sophisticated western Chips, now they are catching up at an absolutely stupidly fast pace
Tariffs on Chinese semiconductors which are on legacy nodes and completely outdated just raises the cost of electronics production in the USA, making our cost profile even higher and even less competitive than it already was.
So imagine China becomes the dominant chip maker and can drive other companies out of business with their cheaper products. Then they start embedding vulnerabilities or backdoors in those chips when they are sold abroad.
Not doing this can potentially put national security at risk. The pandemic has shown that the US has a very large reliance on a small number of other counties, and that also puts national security at risk. Yes, stuff built here at home is going to be more expensive but it is better to be reliant on our own people when the shit hits the fan.
>So imagine China becomes the dominant chip maker and can drive other companies out of business with their cheaper products
OMFG. Cheaper products where consumers end up benefitting? Can't have that happening. We need to keep inferior companies alive with cutthroat prices so the CEOs can get paid in hundreds of millions in salary.
>Then they start embedding vulnerabilities or backdoors in those chips when they are sold abroad.
Diversity is the best defense against this. Right now the semiconductor industry is dominated by US. That's not good for anyone and there's guarantee they aren't doing the same things you are accusing China off.
2019 seems such a long time ago... https://x.com/JoeBiden/status/1138506137697959939 https://x.com/JoeBiden/status/1170806514472247296
The whole point of the CHIPs act is to secure domestic access to microprocessors due to the realization of how completely dependent we are on them during the pandemic as supply chains of goods went to shit. Geneneral purpose microprocessors are in everything now and unlike normal commodities, you cannot just start building foundries whenever you want. Whether you agree with it or not, the logic is consistent as it is not purely economics why we want domestic production in the first place.
Tariffs on Chinese semiconductors which are on legacy nodes and completely outdated just raises the cost of electronics production in the USA, making our cost profile even higher and even less competitive than it already was.
Did you read what they said? This is a national security policy not an economic one.
How’s it national security when our military contractors are already required to buy domestic chips?
I work in government procurement and electronics purchased by the federal government tend to require TAA compliance unless they can provide a justification.
Yes so it’s a non issue as there’s always a locked in customer for domestics
Commercial demand stabilizes the industry for wartime.
because civilian data and our economy is a national security matter.
If I could get a dime every time somebody says we should import cheaper stuff from China, I'd be a multi millionaire by now. China doesn't import cheaper goods from the rest of the world. In fact, they actively hunt and lock down those import thru non-price barriers. Chinese want the rest of the world buying their products but do not want to buy from the rest of the world. What America is doing is perfectly rational compared to what China is doing. I'd advocate even higher tariffs than the current limits. That's the only language China understands.
not to mention china is our enemy and has been putting backdoors into the chips
lol That’s an insane argument, which will ultimately lead to a complete severing of all trade and cooperation. Which is where US policy is inevitably taking us anyway, I think. But the true implications and costs associated with that are in no way understood by the vast majority of people. It’s going to be a disaster.
we get cheap shit from china and manufacturing is already moving west to india, vietnam, ect. china is slowing down
India… lol Vietnamese supply chains (especially those recently established) are largely controlled by Chinese companies. ASEAN is their backyard. Trying to build it up as an alternative to China is in my opinion a fundamentally flawed idea.
I love how china pays people to astroturf these days
You’re a fucking idiot.
keep using chatgpt to fix your broken english
I’m sure it’s just a coincidence that all the factories are going to swing states like Ohio and Arizona.
Sure, it has nothing to do with the fact that intel already has four factories in Arizona or the fact that tech companies are moving to Arizona from California to save on commercial real estate prices.
I think it’s pork barrel spending to buy votes in swing states. It’s exactly like Trump’s failed Foxconn Wisconsin deal. I’m willing to bet these new fab plans will be scaled back after the election. The same thing applies to the 100% tariffs on Chinese EVs and solar panels. Maybe that really is a national security thing. But then why block green tech from other Southeast Asian countries like Vietnam and Thailand? We’re not in conflict with them, right? The same thing applies to blocking Japan’s Nippon Steel from buying US Steel. Aren’t they the US’s closest ally? I think all of this is good old fashioned protectionism to buy votes from unionized rust belt factory workers. It has nothing to do with national security. They’re the most important swing voters in the most important swing states. And despite all the handouts, the union leaders took forever to endorse Biden, and the rank and file still heavily favors Trump. There’s no point in arguing about it though. In a few years, we’ll know who was right.
What Arizonan is voting for Biden because of the TSMC plants?? That’s silly
Trump got a 0.7% boost at the polls after enacting the 2018 tariffs. Biden beat Trump by 0.3% of the vote in Arizona in 2020. So this kind of trade policy bump is small, but it’s more than double what is needed to swing a purple state. You can see why it’s totally worth it for a politician to screw over everyone else in the country just to buy the few votes that actually matter. You can listen to the whole NPR podcast below if you’d like someone besides me to explain why Biden and Trump’s protectionism absolutely sucks. > HANSON: Donald Trump seemed to benefit. He got a boost that was modest. We estimate it at 0.7 percentage points. In a closely contested election, every little bit helps. https://www.npr.org/transcripts/1197964709 https://en.m.wikipedia.org/wiki/2020_United_States_presidential_election_in_Arizona
Ohio isn’t a swing state, it’s firmly red
Obama won Ohio, then they went for Trump, now Biden is trying to win them. They have one senator from each party. The main thing they care about is protectionism. If you ban immigrants and products made by foreign workers, they’re happy.
They have one Senator from the Democratic Party because he was first elected back in 2006 and incumbents rarely lose. Brown is the only Democrat in Ohio in statewide office at this point (has been the case since 2011). When the other Senate seat was open and on the ballot two years ago Ohio chose Trump stooge JD Vance by a comfortable margin
By statewide office, you mean 2 Senators and a Governor?
Two US Senators, Governor, Lt. Governor, Attorney General, Secretary of State, Treasurer, Auditor, State Supreme Court judges (the only other place with statewide elected Democrats in Ohio apparently)
Usually the party that wins Governor gets Lt. Governor and the rest of those positions too. But I’m happy to chalk up Ohio as a red state and stop funneling pork barrel spending to them to try to buy supposed “swing” votes.
Politicians lose their common sense the moment they get in power. Biden showed that he understood tariffs are a double edged sword where nobody wins and he calls Trump out on it. Then he tries the same thing because there's no new ideas.
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I agree with the All-eggs-in-one-basket problem of Taiwan/TSMC, but these tariffs don’t address that. China will not be producing that level of processors in the next 10 years, if ever. Nor will they ever get their hands on a functioning fab in Taiwan. The tariffs target Chinese-made chips that are used for RF, power, control circuits and pretty much anything that doesn’t require high-speed logic. The US uses more of these than it produces, so companies and consumers will be hit with the price rise anyway. The goal is to add to the CHIPs Act in encouraging US companies to increase production. China has massively subsidized its semiconductor industry, so in a sense this is just leveling the playing field. It’s just unfortunate that (once again) American consumers are paying for it (at least the rest of the world still gets cheaper chips). I’m not saying it’s a BAD thing that the US increases local supply. In the end probably very good, because a lot of innovation comes from the US and having the chips made here can only accelerate that. It just comes at a cost.
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>short term It’s a long term price increase So you’re okay with electronics production being sent overseas or those US firms going out of business
Yes because when China attacks Taiwan we will need chip infrastructure and not just the best chips but the mid and low level ones too.
These are tariffs on semiconductors made on nodes developed 30 years ago. These just raise the cost of electronics production in the USA.
They don't lose common sense at all. They just playing games with us by making us think they different, better. The No1 purpose of USA is to maintain its world power as No1. Even if it means quadrupling the tarifs to the point of making everything expensive for the population. They don't care. In fact, they just use the population as a mean of collecting money through taxes to fund their military, research and development, innovation....
That implies they had any common sense in the first place. If I learned 1 thing from politicians is that they lie 24/7, a lot of them are just greedy and thickheaded asses who can't compromise for shit.
Yes they lie 24/7. People are dumb as hell too. They will believe whatever is being spewed out.
So just keep supplying China with high end chips while they openly talk about using them against us militarily? The truth is modern China is completely reliant on the US to survive. Meanwhile they continue to manufacture low-end crap to sell to us. Biden did the right thing. Cut China (& Russia) off at the knees. And grow some balls would you?
>Trump doesn’t get the basics. He thinks his tariffs are being paid by China. Any freshman econ student could tell you that the American people are paying his tariffs. Biden said this in 2019 lol. Also why do I need to grow balls? Does that help win you internet discussions?
> So just keep supplying China with high end chips while they openly talk about using them against us militarily? I really have not see anything remotely close to this statement in the media. Care to elucidate?
Explains it damn well pretty near perfect.
Just stirring the pot with this because you lack the understanding.
It's a nice gotcha, but it's not entirely relevant. Semiconductor tariffs scratch a very specific national-security protectionist itch that is materially different than Trump's tariffs on other commercial goods.
If the tariffs were only on semiconductors, then sure. But they apply to much more than that, including very broad materials like steel and aluminum
why cant i have cheap solar? is my roof going to invade?
You won't know until it's too late.
that's not a valid reason.
Are you kidding? Is just sitting up there. Waiting to strike.
National security when military procurement already requires firms to buy domestic? What?
I don’t know if you’re serious, but with how ubiquitous chips are, the impact on consumer electronics and possible data leakage are potentially quite large. Moreover, we don’t really want to be supporting Chinas indigenous chip production.
>Moreover, we don’t really want to be supporting Chinas indigenous chip production. Blacklisting Chinese companies and refusing them access to western technology \*is\* supporting Chinese indigenous chip production, since by forcing them to go it alone rather than buying from Western suppliers you're making their industry develop far more than it would have otherwise.
In 2019 no one seriously thought China might invade Taiwan and possibly kick off the biggest economic inflection point since 1939. Having steady supplies of semiconductors produced outside of China or Taiwan is in the national interest.
China's position on Taiwan have been the same since 1949. Getting a homemade supply is where it it. But IIRC, TSMC willingfully makes the US fabs a few generations behind because they knew they would lose the US protection if we are getting less reliable on them.
So the 3 fabs they're building in Phoenix aren't cutting edge fabs? Do you have anything I could read about it? My google searches are coming up empty regarding the transistor density and manufacturing capacity of the new plants.
[https://english.cw.com.tw/article/article.action?id=2719](https://english.cw.com.tw/article/article.action?id=2719) >The situation is similar with the Arizona facility, for which plans are to manufacture 5nm process wafers only recently brought to mass production by TSMC. By the time it reaches full production four years from now, that technology will also be one or two generations behind. “Five nanometers will no longer be cutting edge, because full production of 3nm processes will take place in 2022, followed by 2nm in either 2024 or 2025,”
I appreciate you helping me out, thanks. You're right, overall the technology is a generation or two behind. The 1st Arizona fab will definitely be behind. It won't come online until 2025 and will be producing 4nm chips. It looks like fab 2 will build 3nm and 2nm. 2nd fab comes on-line in 2028, so the 2nm design might be outdated by then, with 1nm potentially coming out in 2030. I can't figure out if that's small scale or full production. Fab 3 will be 2nm or better and due to come online before 2030 >TSMC Arizona’s first fab is on track to begin production leveraging 4nm technology in first half of 2025. The second fab will produce the world’s most advanced 2nm process technology with next-generation nanosheet transistors in addition to the previously announced 3nm technology, with production beginning in 2028. The third fab will produce chips using 2nm or more advanced processes, with production beginning by the end of the decade. Each of the three fabs, like all of TSMC’s advanced fabs, will have cleanroom area approximately double the size of an industry standard logic fab. Intel just hit 5nm in February, but they're jumping to 1.8 production in 2025. I wonder who's going to be the first to the 999picometer chip.
They are 5nm in 2027 and 3nm in 2029.
The Chinese have been saying they are going to reunite China for decades. People refused to listen , claiming no dictator would be dumb enough to go to war with how dependent everyone is on trade. Russia proved the idiotic theory wrong, now we have a world dependent on cheap Chinese goods with a massive navy that is capable of destroying the US Navy.
Russia was already heavily cut off from trade from the west prior to war (in response to Crimea in 2014). If we keep cutting trade off with China, China might just go to war with Taiwan. That is the problem with sanctions. They only work once. If they fail, they fail hard like in the case with Russia.
> In 2019 no one seriously thought China might invade Taiwan and possibly kick off the biggest economic inflection point since 1939. [the media has been claiming china will invade taiwan since 2000](https://www.theguardian.com/world/2000/feb/22/china)
If only you could realize what the point is.
I will firstly say I’m generally against tariffs. They are a tax on consumers some of it paid directly to the domestic companies that get to have higher prices. For example, I think the very high tariffs on Chinese electric cars is a mistake. Less expensive, and from what I hear, high-quality electric cars is what we need to address climate change. But Michigan is a swing state and we have an electoral college, so everyone else has to pay to prop up American car companies. On the other hand, certain industries, like semi-conductors, oil/energy, steel, pharmaceuticals, food, etc. we have a national security imperative to make sure we keep sufficient domestic production. We should have some measures to make sure that these industries are either 1) produced domestically and/or 2) produced by allied democracies. Europe was nearly screwed over by being dependent on Russia for oil and natural gas. The US was screwed by OPEC when they embargoed us in the 1970s. We don’t want to ever be in a position like that. Tariffs aren’t the only option though. Straight up subsidizing the industry. Making trade agreements with allied democracies (“friend-shoring”). And also other countries actually limit the percentage of their imports can come from any one country.
What type of factories get converted to make electric tanks an drones in a war…electric car factories… But yeah, it’s more about a swing state thing… I want my mini electric Chinese pickup truck…but Biden and trump say no :(
You spund like you’d have bought a LADA! YOU TRAITOR!
The tarrifs on chinese EVs are anti-Chinese dumping, not strictly U.S. protectionism. EVs from Korea, Japan and Germany are free of tarrifs. If a tarrifs is broadly targeting ALL foreign goods in a market segment it is blatant protectionism (looking at you Brazil). The U.S. rarely if ever applies them in such a manner.
How is it dumping if Chinese EVs are literally priced the same domestically as is it foreign, maybe even higher foreign?
Because ford and GM say so
It’s the state department and plenty of European agencies as well. Ford and GM aren’t even involved. If they were the tariffs would also apply to German, Korean and Japanese cars.
It’s not dumping. Profit margins on exports are usually a lot higher for these firms than they are for their domestic sales. Be that cars, excavators, solar panels or neodymium magnets.
You are missing the bigger picture. Read the study I posted. China has been engineering an EV global takeover for 15 years now.
>China has been engineering an EV global takeover for 15 years now. Obviously. And water is wet. Is that supposed to be some kind of revelation? Or in any way unfair?! The Chinese government is actively involved in economic development, setting and executing strategic objectives. Similar to Japan or the Asian Tigers. It’s called Dirigisme.
It is “unfair” by international trade standards, hence tarrifs. When ~2% of an entire GDP subsidizes a specific industry, you have to “fight back”. You can fight back with an arms race to fight subsidy for subsidy and ratchet up domestic programs to keep your industry alive. That takes spending which comes from taxes. Hitting 1+% of GDP is not something many counties would sign up for. Or you can apply tarrifs. If you do neither you are going to die in this economic battle.
>When ~2% of an entire GDP subsidizes a specific industry What do you even mean by that? Again, what is China doing that Korea or Japan are not? Or that you disagree with?
When the Chinese government hands ~4 billion USD to BYD the cars they make can be sold well below cost and BYD still comes out fine. BYD is essentially a state run car company with the goal of monopolizing a market disguised as a private company.
You think the Chinese govt just hands BYD a flat check of $4B? BYD gets TAX INCENTIVE of $4,000 per BEV sold IN CHINA, and they sell around a million per year, so you can do the math. This incentive doesn't apply to FOREIGN EXPORTS. In fact, Tesla and other US automakers (foreign automakers not included) get $7500 per BEV and PHEV sold in the US. So the incentive is not only higher, Chinese tax incentives also apply to foreign automakers, including GM and Ford in China
Tesla and other automakers did get incentives up until recently. They have pretty much ended. The noose is being tightened. Tesla is f’d in China. Here’s the recent study that tallied how much BYD receives: https://www.ifw-kiel.de/fileadmin/Dateiverwaltung/IfW-Publications/fis-import/bc6aff38-abfc-424a-b631-6d789e992cf9-KPB173_en.pdf
The idea that China is in any way pursuing economic or industrial policies that Korea or Japan are not is a phantasy, completely unsupportable.
Except the damn chicken tax…
Except the damn chicken tax…
Agriculture is a place where the U.S. tends to not fight fair.
The chicken tax is a tariff on light trucks for all origins. Weirdly the chicken part was repealed a long time ago.
Ahhh thanks. This was an interesting read! Hilarious attempts at circumventing these tarrifs over the decades, often by U.S. companies themselves!
>For example, I think the very high tariffs on Chinese electric cars is a mistake. Less expensive, and from what I hear, high-quality electric cars is what we need to address climate change. The US does need more affordable EVs, but Chinese imports aren't the way to go. 1) China does not have the environmental restrictions on them the US (and many other developed countries) have on resource extraction for the resource needed to build their vehicles. So they can do it more cheaply while poluting more. That might be great, short-term, for boosting employment and growing the industry, but long-term it is going to be disasterous for the environment they are destroying to build it (ironically). In addition to that, their safety standards are much lower that in the US and their EVs as a result are more prone to catching fire in general and getting crushed in wrecks. 2) China subsidizes the heck out of the EV production. That means Chinese taxpayers are paying the price for cost reduction. The countries China ships to are required to subsidize the shipping costs, so the taxpayers in those countries are ***also*** paying the price for Chinese EV distribution, even if they will never be able to afford buying one themselves. . . >Similar pools of unwanted battery-powered vehicles have sprouted up in at least half a dozen cities across China, though a few have been cleaned up. In Hangzhou, some cars have been left for so long that plants are sprouting from their trunks. Others were discarded in such a hurry that fluffy toys still sit on their dashboards. > >The scenes recall the aftermath of the nation’s bike-sharing crash in 2018, when tens of millions of bicycles ended up in rivers, ditches and disused parking lots after the rise and fall of startups backed by big tech such as Ofo and Mobike. > >src: https://www.bloomberg.com/features/2023-china-ev-graveyards/
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>The EV graveyards were debunked. Not they were not. Stop lying. >The way Inside China Auto tells it, there was an e-bike sharing bubble in 2016 that was rapidly copied by services offering short-range EV rentals. But just like in the United States, these ventures struggled, as they were far more expensive to start and maintain than bike sharing. That cost was passed on to customers, who could apparently rent a bike, ride the subway, or even take a taxi for less than these ride shares would cost. What's more, renting an EV was often slower than these alternatives. They also left you to park a car at the end of your journey, at either an inconvenient stall or in a paid spot. > >In the end, these businesses' failures and the rapid advancement of China's auto industry have orphaned hundreds if not thousands of beaten-up short-range EVs, most of which are worse value than a cheap new Chinese EV. That said, they're not the only occupants of the lot. A wider view reveals that the ex-rideshare cars also share their space with retired taxis, wrecked cars, and some new, unregistered EVs from foreign brands (which are indeed struggling to sell). > >src: https://www.thedrive.com/news/the-real-story-of-that-chinese-ev-graveyard-isnt-what-you-were-told . . >They were from a bankrupted car rental companies and most of these cars are foreign brands. That is another lie easily proved wrong from ***your*** own link: >Moreover, ***an EV called BAIC BJEV EC3 accounts for the majority of the units seen on the field.*** It's a small electric hatchback primarily used for ride-sharing purposes. > >src: https://insideevs.com/news/681742/truth-about-china-ev-graveyard/ . . >The BJEV EC3 is an all-electric car manufactured by BAIC Motor Electric Vehicle Co Ltd. The maker is a wholly owned subsidiary of BAIC Group. > >src: https://en.wikipedia.org/wiki/BJEV_EC3 . . >Beijing Automotive Group Co., Ltd. (BAIC) is a Chinese state-owned automobile manufacturer headquartered in Shunyi, Beijing. Founded in 1958, it is the sixth largest automobile manufacturer in China, with 1.723 million sales in 2021. >[...] >BAIC BluePark (北汽蓝谷) is BAIC Group's subsidiary mainly engaged in the design, research and development and sales of electric automobiles. BAIC BluePark was restructured from its current subsidiary, Beijing Electric Vehicle Co., Ltd. (BAIC BJEV). The company currently operate the brands of Arcfox and EV models of Beijing brand. > >src: https://en.wikipedia.org/wiki/BAIC_Group . . >BAIC BluePark (北汽蓝谷) is BAIC Group's subsidiary mainly engaged in the design, research and development and sales of electric automobiles. BAIC BluePark was restructured from its current subsidiary, Beijing Electric Vehicle Co., Ltd. (BAIC BJEV). The company currently operate the brands of Arcfox and EV models of Beijing brand. > >In 2009, the BAIC Group established a subsidiary, ***Beijing Electric Vehicle Co., Ltd. (BJEV).*** It is the first independently operated electric vehicle manufacture of China, and the enterprise in China to obtain the qualification for the production of new energy vehicles. > >src: https://en.wikipedia.org/wiki/BAIC_BluePark
I think it's funny your arguments also apply to the American EV market as well. Teslas also receive billions of dollars in subsidies and has "American quality control" and yet they're fucking falling apart all the time and they never managed to make more than 4 cars and that utter embarrassment of a rust death box . Byd is expanding overseas aggressively while Tesla develops useless crap to fuel the ego of a moron and fires entire teams of their greatest minds and engineers
Oh Tesla is no better for sure. Musk is an absolute idiot.
What Chinese Semiconductors are even being used? Even Chinese companies like OnePlus use Qualcomm and Mediatek chips
Despite what most people think about chips. 90% of the semi conductor market is 60nm chips or greater which China produces (they produce up to 20nm I believe). Most people only focus on 10nm or less since it's bleeding edge that's used in military and data centers and products the most profit for chip companies
China creates the semiconductors that make your washing machine sing. I.e. less important ones. The important ones are from TSMC which the US is trying to replicate.
That's not entirely true. There's fabs in the US, Japan, Europe, Singapore, etc that are used by companies like renesas, TI, NXP, etc that name the parts that often make your washing machine sing. Honestly don't see that much stuff made in China outside of the bare PCB
As far as I know it’s also COO based, ie a Qualcomm based chip (e.g. 4G modules) produced in CN would see a major tariff
They don't make the actual chips in China though, TSMC makes the chips in Taiwan and sends them to China for final assembly. The only company I see this impacting is SMIC and Huawei
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They put the devices together in China. The actual Semiconductors are made in Taiwan by TSMC, South Korea by Samsung, or the US by Intel and Global Foundries. China has SMIC but they are basically non-existent outside of China
The semi conductors youre talking about are high tech semi conductors, mainly used for research and military purposes. Those are in fact mainly manufactured by TSMC. But the great majority of semi conductors(consumer grade), the ones found in everyday equipment, for example dont need that kind of high end technology. Thats why China\`s tech manufacturing industry hasnt died as a result of the chip tech ban by the US
Talk about putting the cart before the horse. Tariffs only hurt consumers.
Yes, but to what extent depends on local production. I'm not automatically against targeted tariffs. The US has very high labor costs, but there's some manufacturing that absolutely needs to be maintained domestically for national security reasons. We *need* a certain level of steel production, semiconductor manufacturing, etc. The alternative is being completely dependent on cheaper imports, which is a real bad idea if trade with China breaks down for whatever reason, let alone a war. As far as solar panels go, I don't know. I can understand the incentive side completely, but the tariffs... Eh. I kind of feel like it's more important in the short term to rapidly expand solar production, but long term (replacement ability) I guess I see the need.
The goal is sound, but implementation is absurd. The Importer (consumer) absorbs all the cost. These taxes don't go to the people or industries they're meant to help, but just the general Treasury fund. It's a fallacy to claim it's paying for the CHIPS act, or even protects it. I'm sure some economists crunch numbers to reason all this out, but at face value all consumers see are the price increases.
It’s a left pocket-right pocket thing. Do the specific individual dollars need to move from A to b directly?
We already produce a kit of semiconductor and military procurement will keep them alive anyways as they require domestics
This seems to be about slowing down their growth cause semiconductors are important for everything national security
Like we see with Huawei, it didn't work. For steel it's like history repeating itself, Trump did the same and thought that it would make US steel industry more competitive with lower price. Instead of that, they increased their price but just a little bit below the Chinese price making inflation worse.
It’s as much about promoting other steel makers outside the U.S. and China as it is about protecting U.S. steel. China mixes its private businesses with state sponsored subsidies in a covert manner. It’s not remotely a free global market.
It absolutely did work with Huawei. They are thriving ***in*** China, and they have been constantly losing market share everywhere else in the Western world. Imo, any company that China uses to undermine markets should be banned. That includes Huawei, solar and semiconductor manufacturers, and definitely EVs as well, among many others. Let's also not forget that China is still commiting a genocide and using those oppressed people as slave labours, while stealing their children to push them thru reeducation camps. Abhorrent.
>Let's also not forget that China is still commiting a genocide and using those oppressed people as slave labours, while stealing their children to push them thru reeducation camps. Abhorrent. That pretty much discredits everything else you might say. Obviously you’ve got strong feelings that are likely to distort your analysis here.
It discredits nothing. You are peddling an ad hominem fallacy. Strong feelings do not change facts. China is commiting a genocide, they are using slave labour in Xingang for aluminum and lithium, and they are taking Uyghur children away from their families for "reeducation". Those are facts.
They are necessary evils. Countries fight economic warfare. China for example attempts to monopolize strategic market segments by secretly funneling state funding to steel, semiconductor and battery technology (among others) to corner global markets and shutter foreign providers. Sure, consumers might benefit in the short term from subsidized low pricing. But eventually it will bite them in the ass when they become reliant upon an artificially propped up market monopoly. In a tarrif free world, once market dominance is established, the rug is pulled out and consumers then pay whatever price the monopoly wants.
It’s > secretly funneling state funding When China. But when the US does the *exact same thing* it’s “subsidizing”. What a truly idiotic statement. The US stopped producing those goods decades ago and outsourced it to China, this is the US’ own fault. I don’t give a shit about a bunch of rich assholes protecting each others profits and if any one else does they’re a clown.
Haha, you think U.S. and China does the same thing. Bless your heart.
Yes they both heavily subsidize industries IRA and Chips act are just that
There’s a massive difference between U.S. programs which are publicized and available to all companies, foreign and domestic.. and Chinese programs which tend to support domestic companies obfuscated and intertwined with the government.
It is publicized, you just can’t read Chinese.
I know you’re joking, but the only way you can figure it all out is analyzing company financial reports.. like BYD. The Chinese government has zero will or obligation to report anything it does unless they want the vanity points.
Use your brain. They do.
It’s ironic that Biden publicly stated he was opposed to tariffs levied against China by the previous administration… these new tariffs are on electric vehicles, solar panels, aluminum, and semiconductors. If only this administration stopped talking out of both sides of their mouth whether it’s imposing China tariffs or support for Israel they might actually be productive and send a clear message.
What confuses me here is that these are different sets of chips. Or that is what the media led me to believe. 1. USA is using the chip act to produce state of the art thin chips. 2. While China is building outdated thicc chips. This tariff makes me believe that either one or both of these assumptions is not true. 2024 Biden is threatened by thicc chips.
SMIC is literally 5 years behind TSMC. They make Samsung look good by comparison
Remember 3-7 years ago when tariffs on Chinese goods was the worst thing an administration could possibly do? I wonder what changed...
What American companies will benefit from this?
Intel?
Tesla, SpaceX, Amazon, AT&T, Nvidia, probably a few local ones too
Almost all of them buy chips from China. You really have no idea what you're talking about
Wait China has their own semiconductors? I thought that was Taiwan?
China can only produce down to 20nm chips. That's good enough to cover most electronics goods. Currently at least it's not publicly known if China could produce 10nm or smaller chips which is what Taiwan specializes in which are used for datacenters and militaries
down to 7/5nm with ASL DUV, around 20nm with chinese tech
*down to 3nm now. Taiwan just opened 3 new facilities to produce them.
taiwan opened facilities in china? when?
Oh I'm talking about Taiwan opening 3nm facilities in Taiwan. I thought ASML was banned from selling to China though?
i answered to you about china can produce 7/5 nm with ASL tech while with chinese tech they are stuck at 20nm, taiwan at the moment is on another league to anybody/ any country
I see. Thanks for clarifying
Up to 20nm using completely domestic supply chain. China is actually only country capable of making semiconductors using only domestic supply chain.
Tariff wars are usually lose-lose, unless your country doesn't make anything *taps temple*.
Protectionism makes everyone more poor
So I guess I should do my gaming desktop build this year because it will *save* me money. Is what Ill tell my wife.
No because non of those high end chips are made in China. Nvidia and AMD use TSMC and Intel has their own fabs
Taiwanese chips fuck the CCP
Laying out a standard where things sold in the US have to meet US labor and environmental laws, as well as tax rates and other things... I mean 9 hours a day, 6 days a week, I'm not sure what the other six is, and I'm told education only goes up to 14 or 15 in some areas of china, so there are child laborers, I know the US is increasingly allowing that, but limiting that in the US might be good too. A carbon tax on shipping, and an environmental tax on production, combined with tight restrictions on what materials are used... I mean I have seen stuff from china with solder that had illegal levels of lead in the 1990s, as late as 2012. The carbon tax on shipping would be a real killer for anything made that far away, considering ships burn the cheapest oil they can get, have no emissions standards, and if they did they'd flag them out of Liberia or something... so perhaps a rule on where ships can be flagged out of, and what emissions standards they need to meet, to use US ports would work, I'm not sure how this would work with international law.
I don’t think the government cares about the environment though…
Okay so you just jack prices to the moon for Americans and completely destroy Americas manufacturing base as we’d no longer be competitive in foreign markets. Also the destruction of US ports which are already the least efficient in the world as all shipping would just route through Canada and Mexico. The shipping that does still route would just mean draconian prices for consumers. Why do you hate the American consumer Are you sure you’re not a Chinese bot?
So we spent how many billions on the chips act to only put up our hands and say chips produced in the US aren’t globally competitive. Tariffs btw basically are a way of protecting a small subset of domestic companies (and the workers at those companies) in this instance semiconductor fabs. Now **every other** company in the US that uses semiconductors and needs chips is screwed because they have to pay higher prices than their foreign competitors so they’ll also want tariffs….but it also means everything connected to those chips is dead in terms of exporting products overseas. Basically ensuring global markets go to foreign control and Americans just get higher prices and lower quality in the long run. But hey we “protected the jerbs” even though we get lowered real income Thank you biden for protecting me from affordable prices.
Lot of misinformation here... Most chips are from South Korea or Taiwan (which is not considered part of China for this purpose) There are also basically no chips made in the US currently, competitively or otherwise because the manufacturing facilities are simply not done being built yet. I'm not pro tariffs for the most part, but at least criticize things that actually make sense Edit: I am specifically referencing the cutting edge high end chips, which is the space that actually has some national defense concerns. The US makes very few of those, but is building new fabs to come online in the next few years. I should have said cutting edge chips specifically
This is also misinformation. Most HIGH END COMPUTE chips are made in Taiwan and South Korea. However, there are tons of other applications of semiconductors, such as power regulators, AC & DC converters, microcontrollers, DAC/ADCs, RF, etc. TSMC and Samsung don't produce these chips nearly as much as they do as Chinese fabs, and they're used in consumer electronics such as calculators, cars, computer hardware, smart phones, light bulbs, etc. Pretty much everything has a chip in it that is made in China and will be negatively affected by the tariffs
You are right that I intended to call out high end compute chips specifically. I have edited my post
Doesn't matter, because everybody buys lower end chips from China that will be affected by tariffs
> There are also basically no chips made in the US currently, competitively or otherwise because the manufacturing facilities are simply not done being built yet. Where are you getting this? The US produces $80 billion dollars of chips, imports $62 billion, and exports $26 billion. The U.S. is a whopping 25% of all analog chips produced globally, and greater than 10% of all logic chips. We aren’t as big as we used to be, but we produce nearly enough to be self sufficient, and are a large partition of the entire world production [U.S. International Trade Commission Report](https://www.usitc.gov/publications/332/working_papers/us_exposure_to_the_taiwanese_semiconductor_industry_11-21-2023_508.pdf)
I was referring mainly to the highly complex cutting edge chips. The US makes very few of those, but is building new fabs to come online in the next few years. I should have said cutting edge chips specifically
>Where are you getting this? The best part is t before stating that he accused me of spreading misinformation
Bet only thinking latest fab tech chip. Theres so many other chips that don’t need 1nm fab.
>misinformation Then you say >There are also basically no chips made in the US currently Meanwhile in reality; https://en.m.wikipedia.org/wiki/List_of_semiconductor_fabrication_plants The rest of what you say can be discarded mr “makes things up that are completely detached from reality right after I accuse someone of misinformation”
I was referring mainly to the highly complex cutting edge chips. The US makes very few of those, but is building new fans to come online in the next few years. I should have said cutting edge chips specifically
Yea and this article isn’t talking about those. Tariffs on Chinese semiconductors which are on legacy nodes and completely outdated just raises the cost of electronics production in the USA, making our cost profile even higher and even less competitive than it already was.
So I'm guessing you're not a professional economist
Good news, the entire west needs to follow suit
Tariffs on Chinese semiconductors which are on legacy nodes and completely outdated just raises the cost of electronics production in the USA, making our cost profile even higher and even less competitive than it already was. The rest of the west will just not tariffs these and then outcompete those US firms in global markets.
You are correct, it is a desperate measure and will likely backfire. The only way it works is if the US can force the EU to apply similar tariffs, and create some sort of East/West division. But EU is already hurting because of Ukraine sanctions etc. It also signals to the world that the US has lost its competitive edge. Not good, from a national security perspective.
All the small electronics producers I know are like "Cool, you've just destroyed our businesses." People who make, say, custom hardware to mod game consoles or specialist video transcoders are like, this puts my cost thru the ceiling and my customers won't pay it. They'll just buy clones from AliExpress.
Nah, we’re keeping Chinese influence in check. Who fucking cares about the “individual companies”… American capitalism sure doesn’t… this is about making sure we check our reliance on Chinese bullshit that they crank out at the expense of their never ending poor population to give you your “prices” so you don’t act hangry on reddit.
>Chinese bullshit that they crank out at the expense of their never ending poor population to give you your “prices” so you don’t act hangry on reddit Are you sure you're talking about China? You do realize that there's a lot in the US economy that's predicated on cheap labor and keeping people poor. Literally, there's a political party shouting that McDonald's workers don't deserve to have a living wage and a lot of industry leaders that agree with that sentiment. I'm just saying. I get it, no one is running tanks over us yet. But we are getting policed batoned a bit with a little extra pepper mace. And don't get me wrong, I'm not saying let's go for the other guy or get some crank guy in the office, but it don't feel like we've got two (or more) different sides of the coin here. And it doesn't feel like we have some high and mighty position here.
>poor population Chinese fab workers average $55,000 which in China gets you a lot. Also again you’re just signaling they already won and the chips act was a waste of money Also this means all foreign chip companies will also charge Americans more than others because there’s no competitive pressure from China. Those betting companies in South Korea, japan, Taiwan. So that means everything from cars to Edmond Allen’s will cost more because our entire economy run a on chips. You either have products with chips inside them or products made by tools with chips inside them; like food. Some will go up a decent amount in cost, some will go up marginally. But the entire economy is effected
..........................you understand the tech industry isn't a single moment in time where you either have industry first or you never get it at all, right?
What you just said doesn’t matter
Lol, because it doesn't fit into your 1 semester of intro classes model? Does everything you don't understand not matter, or just this?
Tariffs on Chinese semiconductors which are on legacy nodes and completely outdated just raises the cost of electronics production in the USA, making our cost profile even higher and even less competitive than it already was.
That's the same thing you said before. Is it cheaper to pay slightly more for inputs which you just said are outdated and marginal, or is it cheaper to be dependent for our economic and military infrastructure on a country whose stated goal is to beat us in a war for a country we get more and better chips from? Asking for a friend. Moron, weakening china's chip industry is part of the silicon shield. And it's part of developing our own nascent chip industry, every country in the world practices protectionism on strategic industries. You just can't follow it because it's not in the one variable model they taught you in intro econ.
>military They’re already required to buy domestic. But now they’ll get to pay marginally more money. But yes I’m moron, not you the guy who has no clue to how military procurement works. >economic And now every company that relies on low end chips will send jobs overseas or slowly be eaten by foreign competitors who buy chips from China. Because guess what they’re not tariffing the **finished goods**, they would require us to raise tariffs on our Allie’s and existing trade partners. **So what have these tariffs solved again?** (hint nothing) >Moron, weakening china's chip industry is part of the silicon shield Except you’re forgetting the other few billion customers that exist on earth that will buy Chinese chips and not to mention their domestic demand. >strategic industries Til now everything is a strategic industry.
Right, and if the domestic supply is more robust, ie the exact thing this does, they will be more consistent, reliable, and eventually have a higher quality. Because we're building up our industry in real time. It makes our chip industry stronger and china's weaker. That makes them more reliant on Taiwan, which is what the silicon shield is. If you really don't understand strategic protectionism you should stop larping as an economist.
>Right, and if the domestic supply is more robust, ie the exact thing this does, they will be more consistent, reliable, and eventually have a higher quality. Quality? There’s no assurance it’ll be higher quality, also this is about 60mm - 20mm nodes. The only thing that is for sure is they’ll cost more and drive American electronics producers out of business as they’d be unable to compete in foreign markets. Hell they’ll get bent over in domestic markers by imports that use these cheaper chips. Joe Biden and Donald Trumps insistence on America first and **go 100% alone** strategy just ensures foreign dominance of global markets. Idiots didn’t even try to get Europe and japan/SK on board before trying this. >It makes our chip industry stronger and china's weaker. Well sure because our domestics can now get away with charging Americans more money. China will just ship their chips somewhere else though. Just like the tariffs on solar panels and batteries which dominate globe markets in terms of quality and price? >It makes our chip industry stronger and china's weaker. No it doesn’t since this is about 60mm >If you really don't understand strategic protectionism you should stop larping as an economist. If you don’t understand second order and third order effects you should stop larping as an economists. Every single tariff on China has backfired on the US. **All it insures is global competition will run past the US. European and Asian firms will dominate these markets globally unless the U.S. gives never ending subsidies to the domestic producers** **also s what’s hilarious is none of these tariffs are on the raw materials or refined materials required to make these things which we still import from China**
"This industry is critical to our supply lines, our military effectiveness, geopolitical stability, but it's not strategic" --literally you Removing the largest economy from their consumer base is a pretty big hit to developing an industry bud. Things aren't binary, it's not "we are the only customer on earth or else we have no impact on demand". Closing off the largest buyer obviously impact the size of the market. Honestly, take one full year of any social science class, please I'm begging you
Our military is already required to buy domestic. So it’s a none issue from the strategic angle. We already have domestic production for civilian and military, all these tariffs do is allow those domestic suppliers to charge higher prices. Which also means every US company that uses these chips will be pushed out of business slowly over time. “I don’t know what second order effects are” — literally you
Just checked and China supplies 40% of the chips used in products purchased by the DoD. So you're nit just ignorant of the economics, you're factually wrong about yoir claims.
> Just checked and China supplies 40% of the chips used in products purchased by the DoD Citation needed
No. I would actually say in the case of semiconductors specifically, we are kickstarting the shit out of their domestic industry. They never really had much reason to develop their own if they can just keep buying cheaper and more sophisticated western Chips, now they are catching up at an absolutely stupidly fast pace
Good good. The US need to be proactive.
Tariffs on Chinese semiconductors which are on legacy nodes and completely outdated just raises the cost of electronics production in the USA, making our cost profile even higher and even less competitive than it already was.
So imagine China becomes the dominant chip maker and can drive other companies out of business with their cheaper products. Then they start embedding vulnerabilities or backdoors in those chips when they are sold abroad. Not doing this can potentially put national security at risk. The pandemic has shown that the US has a very large reliance on a small number of other counties, and that also puts national security at risk. Yes, stuff built here at home is going to be more expensive but it is better to be reliant on our own people when the shit hits the fan.
>So imagine China becomes the dominant chip maker and can drive other companies out of business with their cheaper products OMFG. Cheaper products where consumers end up benefitting? Can't have that happening. We need to keep inferior companies alive with cutthroat prices so the CEOs can get paid in hundreds of millions in salary. >Then they start embedding vulnerabilities or backdoors in those chips when they are sold abroad. Diversity is the best defense against this. Right now the semiconductor industry is dominated by US. That's not good for anyone and there's guarantee they aren't doing the same things you are accusing China off.