The self-proclaimed Tariff man now has his focus on Taiwan. Let’s investigate Trump’s claim in detail.
Taiwan, Trump’s Latest Outrage
Please consider Trump Takes Aim at Chips Act
Former President Donald Trump reiterated his frustration with Taiwan over the weekend when he appeared on “The Joe Rogan Experience” podcast and accused Taiwan of stealing America’s chip industry.
Trump criticized the U.S. CHIPS Act and said he would implement tariffs on chips from Taiwan if elected president. Such tariffs would impact the global leader in chip building, Taiwan Semiconductor Manufacturing Company, whose customers include companies such as Nvidia and Apple.
“You know, Taiwan, they stole our chip business … and they want protection,” Trump said during his appearance on the podcast, which was published Saturday.
Intel, which has emerged as a poster child for the CHIPS Act, has faced many challenges. “We want to get leading-edge infrastructure built here in the U.S., and to be honest, from a policy standpoint, it really shouldn’t matter all that much who is building it,” Bernstein analyst Stacy Rasgon told CNBC.
Rasgon added that the idea that Taiwan had stolen our chips industry is “ridiculous.”
Taiwan Semiconductor is on tap to receive nearly $7 billion from the U.S. Commerce Department to build its Arizona foundry as part of the CHIPS Act. On the company’s earnings call two weeks ago, the company’s CEO, CC Wei, said its Arizona plant was making progress, with volumes expected to ramp in 2025.
Trump also suggested foreign companies shouldn’t be able to enter the U.S. and use government money. “That chip deal is so bad,” he said. “We put up billions of dollars for rich companies to come in and borrow the money and build chip companies here. They’re not going to give us the good companies anyway.”
Delusional Nonsense
Once again, Trump sounds like a delusional fool. Intel is struggling and Taiwan Semiconductor is the best chips manufacturer in the world.
Yahoo!Finance reports
“Taiwan Semiconductor Manufacturing (TSM), otherwise known as TSMC, is closely associated with Nvidia and other semiconductor stocks. It is the top semiconductor manufacturer, building the actual products for Nvidia and many other top companies.”
“TSMC has a massive 61% market share in the global semiconductor foundry market. Demand for its services is increasing as companies such as Nvidia design more powerful chips for TSM to produce.”
Getting TSMC to build a factory in the US was one of the best things out of the Chips act.
Intel’s Money Woes Throw Biden Team’s Chip Strategy Into Turmoil
On September 4, Bloomberg reported Intel’s Money Woes Throw Biden Team’s Chip Strategy Into Turmoil
The Biden-Harris administration’s big bet on Intel Corp. to lead a US chipmaking renaissance is in grave trouble as a result of the company’s mounting financial struggles, creating a potentially damaging setback for the country’s most ambitious industrial policy in decades.
Five months after the president traveled to Arizona to unveil a potential $20 billion package of incentives alongside Chief Executive Officer Pat Gelsinger, there are growing questions around when — or if — Intel will get its hands on that money. Intel’s woes also may jeopardize the government’s ability to reach its policy goals, which include establishing a secure supply of cutting-edge chips for the Pentagon and making a fifth of the world’s advanced processors by 2030.
The Silicon Valley company is supposed to receive $8.5 billion in grants and $11 billion in loans from the 2022 Chips and Science Act, but only if the chipmaker meets key milestones — and after significant due diligence. That process, which applies to all Chips Act winners, has been clear from the outset, and aims to ensure that companies only get taxpayer dollars once they’ve actually delivered on their promises. Intel, like other potential recipients, hasn’t received any money yet.
The holding pattern follows a disastrous earnings report on Aug. 1 that ratcheted up pressure on Gelsinger. After the company posted a surprise loss and delivered a dismal outlook, Intel shares suffered their worst rout in decades and two major credit raters downgraded the firm’s debt to just a few notches above junk. The chipmaker also is slashing roughly 15,000 jobs — a troubling development for a company that is supposed to help bolster the US semiconductor workforce. Those cuts have drawn criticism from Capitol Hill.
But while firms like Taiwan’s TSMC offer technology that’s widely regarded as the world’s best, Intel has struggled to convince industry officials and investors of its product capabilities. The chipmaker has said that some companies are exploring using its factories, including Broadcom Inc., MediaTek Inc. and Microsoft Corp., but none has gone into full production yet.
Art of the Deal
No one can destroy a deal like Trump
To be fair, there are TSMC delays as well but the reason isn’t quality or junk bond status like Intel, its labor costs.
In July, TSMC delayed the opening of the first plant from a scheduled timeline of late 2024 to 2025, citing a lack of specialized labor. The project has also dealt with delays due to COVID-19 surges and licensing issues.
“We are well on track for volume production of N4, or 4-nanometer process technology in the first half of ’25 and are confident that once we begin operations, we will be able to deliver the same level of manufacturing quality and reliability in Arizona as from our fabs in Taiwan,” Liu said.
To combat the labor constraints, TSMC planned to start importing workers from Taiwan, which prompted an outcry from the local construction union in Arizona. The union suggested the move was a ploy by TSMC to save money by hiring foreign workers.
Quality Not Job 1
Trump will cheer higher labor costs, so will Biden. Both would rather pay more for unskilled US labor than less for high quality talent from Taiwan.
Who in their right mind wouldn’t want to pay more and get less?
Oops wait a second. The previous report on TSMC delays was from January.
Ahead of Schedule
In April we see this headline TSMC says Arizona Fab is Now Ahead of Schedule.
In September, TechPowerUp reported TSMC Arizona Achieves Yield Parity with Taiwanese Facilities, Production Remains on Schedule
Balance of Trade
I don’t know about you, but I am sick, worried, and very upset over that earth-shattering trade deficit with Taiwan (green line in above chart).
And what do we get out of it other than Apple sales, Nvidia sales, and taxes on those sales. And what Apple stores and all the people Apple hires?
Those who think in 2D incorrectly add up the benefits of Apple sales, Nvdia sales, taxes paid by Apple employees, and benefits of having a state-of-the-art TSMC foundry in Arizona.
Not me.
I’m with Trump. I would rather pay more, get less, and wait longer to get anything at all, than have a trade deficit with Taiwan.
The beauty of Trump’s 8-D thinking and his impressive Art of the Deal is on full display here. I pity those who can only think in 2-D.
Three New Trade Deficit Charts Will Have Trump Howling
This morning, I commented Three New Trade Deficit Charts Will Have Trump Howling
The advance trade data on goods imports and exports took a huge turn for the worse in September.
On September 26, I commented Trump Claims Tariffs Will Reduce the Trade Deficit. Let’s Fact Check.
Trump’s Tariff Claims on Truth Social
May 31, 2023: Remember, I terminated the worst trade deal in USA history, NAFTA, and replaced it with the best, USMCA. Also got China to pay our great FARMERS 28 Billion Dollars in damages!
Please consider Trump vs Frederic Bastiat: Who Is Right About Tariffs?
Ignorance or a Lie?
Trump claims foreigners pay the bill. That either ignorance or a flat out lie.
US importers can either eat the cost or pass it on. In most cases it is the latter.
But foreign exporters can mask the exports by value added processes that hide the origin of the goods. This adds cost frictions as well, but at a lesser rate.
Tracking the Economic Impact of the Trump-Biden Tariffs
The Tax Foundation Tariff Tracker investigates the Economic Impact of Trump-Biden Tariffs.
Please read the sobering report.
Trump Will Raise Taxes and Increase the Price of Goods
Yesterday, I commented Trump Will Raise Taxes and Increase the Price of Goods
Since tariffs are a tax on consumers, Trump is threatening the largest tax hike in US history.
Please check it out.
The Taiwanese will be happy to pay whatever Trump demands if the US gives an explicit guarantee of protection
After the US’s guarantees to protect Ukraine proved to be worthless I don’t think Taiwan is going to fall for that
Small countries will be relying on nuclear weapons in the future not bloviating gas bags.
It’ll get a lot uglier, once; in not too long; Chinese SAMs denies even Israels latest generation US warplanes sufficient safety of operation when violating the airspace over Israel’s neighbors, to make attempting to so viable.
Israel will effectively be dependent on China simultaneously being able to hold back an awful lot of pent up animosity heading the other way.
And it won’t even be due to anything more than Chinese defense shops needing realistic practice against the latest and best the US has to offer, without having to engage America directly to gain it. As in: They can remove any realistic military threat from Taiwan, simply by showcasing defensive ability over Lebanon and Syria. Israel being caught on the wrong side of history, being no more than a side effect.
To be clear, the bloviating gas bag in this case was Biden, right?
Trump warned Angela Merkel not to rely so much on Nerd #1 and #2. Trump wants us to be less dependent on Taiwan. He isn’t against Taiwan. He wants TMC, with its focused portfolio in Taiwan, to shift fabs to the US in order to reduce risk and to preserve itself. China is a rising threat. Only fools like Groucho Marx and Tony Hinchcliffe can joke about it.
And, being an economically illiterate dunce, he thinks; or more accurately imagines since actual thinking is quite a bit beyond his grasp: TSMC became what they are today, on account of focusing strategy on “what will it take to ‘make’ billions upon billions from idiotic American governments robbing already destitute Americans some more.” Rather than on “how do we most efficiently build the best chips the market demands.”
‘Cause, in the #DumbAge, everybody knows that idiots with weird hairdos picking winners, is such a recipe for international competitiveness and all..
trump validates Groucho’s statement: Politics is the art of looking for trouble, finding it everywhere, diagnosing it incorrectly and applying the wrong remedies.
Groucho Marx
Trump also validates the saying that nature abhors a vacuum…..McCain, McConnell, Romney, , Ryan, Haley, etc, have all been empty promises
Trump’s Enemies List is the biggest.
Adding Taiwan to the bottom now…
keeping Trump himself at the top…
as he is his own worst enemy.
He’ll say anything. He is…
King Chaos the Shit Talker.
600 thousand dead Ukrainians might disagree with you. They would not have been on his enemies list and would be alive today
Good policy: Pretty soon the USA will be unable to buy chips at a competitive price and lack the rare earths to produce high end military gear or technology.
If you could see the wokeness creeping into the defense companies you would realize how likely in 20 years we won’t be able to build a missile, tank, ship or airplane. Feelings over competence….
Possibly he sounds like a delusional fool because, …., he IS a delusional fool!
The question of whether to let non-citizens vote in our federal elections is up before the Supreme Court. DOJ vs Youngkin.
Nice to see our President uniting the country as only he can by calling the supporters of Trump garbage. Lol. More winning strategy from the Ds
Domestic production of semiconductors is a key element of national security. Paying more for labor is a small price to pay for protection against foreign adversaries. More jobs keep people off the streets, which is protection against domestic adversaries.
Foreign adversaries? Taiwan?
Trump is delusional seeing a problem with our chip manufacturing being almost wholly in Taiwan? Which the moment China starts invading will be out of production & likely in ruin.
Do you get paid by China to diss the idea of getting at least some chip manufacturing back inside the US for national security reasons or are you a globalist shill?
I didnt sign up for your dissertations, some of which make sense. But this doesn’t, the fact the such a central component is only made in one place that is insecure in its position defensively is a problem for everyone.
If you didn’t sign up, why are you here?
Intel HR layoffs are good to go. Those who quit got their money. Those who didn’t
might join the unemployment line. Intel boss changed priorities. Instead of high end fab to serve NVDA it will stay the course with “Inside Intel” in computers and laptops. Existing fab productions will expand. Sales and administration to the recycle bin. NVDA made a new all time high. ASML is down. INTC plunged. TSM reached a new all time high. We are addicted to TSM. We are running out of SM-3 and Patriot missiles to protect Taiwan and ourselves. Putin, Iran and the Hooties depleted us. If China takes over Taiwan we cannot produce smart weapon.
Two SM-3, $15 millions each, to intercept $10K drones or $30K Hooties missiles. Iranian ballistic missiles cost about $100K. SM-3 are hard to maintain and hard to produced. Germany lost WWII bc every system they touched was too sophisticate. Stalin T-34 was the inverse of the Panzer. 8,800 Panzers vs 40,000 T-34 and thousands 75mm anti tanks guns.
The tiny/ agile Mig 17 beat the Phantom in Vietnam. In a systemic change, we built the smaller/agile F-16. They are still flying, though they are less agile today, loaded with advance radar, computers, ECM…old pilots cannot fly them.
Israel’s enemies used that idea that number at a lower cost would overwhelm Israel’s defenses but that doesn’t seem to be working, hasn’t it? Israel is mass-producing its missiles and the unit cost has dropped enough that they can keep it up longer than its enemies. They now have large orders from many countries for these systems. The profit generated from these orders will overwhelm Israel’s enemies ephemeral cost advantage.
THE MICROCHIP, a poem
Just a few poetic thoughts on the chip that rules the world. If you’d like to see more of my writings go to: dark-dot-sport-dot-blog , where -dot- is a period
I agree with your assessment of Intel versus TSMC. Intel has struggled with advanced chip architectures for the last decade and I do have personal knowledge on this very topic. Getting TSMC to do more manufacturing in the US is very important for national security. We need domestic capacity for their AI chips. China looms large.
The great planet United States. In the end, all we have left is the world reserve currency as a comparative advantage. Maybe not even that.
The last tariffs that Trump put in place where circumvented by most Chinese suppliers simply by finding another tarrif code and paying less tarrif than they did before the tariff were implement. Meanwhile many honest US companies that shifted manufacturing to China by US large corporations to maintain supplier status paid the tariffs making them that much less competitive and allowing the Chinese suppliers to take even a bigger market share. Living through this cost me to lose sales and eventually my job.
90+% of the population haven’t got a clue what he is talking about, and neither does Trump. I bet that part of the interview won’t make it into talkshows.
There are problems that have far higher priority, like do you still have a country?
Still, it is mind-boggling that Intel cannot get its act together, despite having access to the same technology as TSMC. Is it in skill gap, lost processes, or tattered supply chain? Nobody is saying. When you loose the industry, there is nobody qualified enough to even evaluate, and neither TSMC nor Samsung is going to tell you.
“Stealing” was a figure of speech.
The term stealing is used all the time in business.
Trump likes to listen to himself talk and than watches the media jump all over it. However most things he says are plagiarize from the far right talking heads that know nothing and like to stir the pot to get ratings. And the whole thing feeds back on itself and all the zoombie Maga eat this stuff up. Now many celebrate Diwali which revolves around the triumph of light over darkness, knowledge over ignorance, and good over evil. Hopefully many see the light.
Well he did say that because the chips are made in Taiwan, we have to defend Taiwan now and he is right. Offshoring chip manufacturing didn’t save us any money nor lives if you add it all up so he does have a point.
We can allow educated Taiwanese residency in the U.S. and incent their chip companies to move here within the next couple years. After that, Taiwan is on its own. No American life should be endangered to keep Taiwan separate from the rest of China.
The U.S. has a legacy problem. Protectorates that were sheltered during the Cold War continue to demand Big Brother’s strong arm in support during the postmodern good times that have arrived. The problem will have to be resolved within the next generation.
That sounds like more of a problem for the protectorates than the US.
Anecdote from a northern European country rich in diversity. Two Chinese emigre families moved back to China because of street level security. Too bad they were the skilled class you call for.
I know, one anecdote, but they add up.
The Taiwanese skilled and educated class don’t have to come here. They can stay in a unified China. My main point is that there has to be an end date to out “protecting” Taiwan from China. They will be unified. The only question is how much bloodletting that entails.
Thanks for letting us know that important part was left out
The problem is that Taiwan turned itself into a democracy that is vibrant and a real one. Would we be willing to let China take over a democratic country? South Korea did the same thing and for the same reason, to keep the US security umbrella.
Putting tariffs on semiconductors from Taiwan would be the most nonsensical move imaginable. So much so that I’m certain he would be talked out of it.
And so what are we to conclude here? Vote for Trump because Kamala is so much worse and depend on the adults in the room to keep Trump from doing anything really catastrophic? Except there will be no adults in the room this time.
Sure there will – Steve Bannon, Stephen Miller.
Elon Musk admitted that he knows that Donald Trump’s policies would crash the economy if he’s elected president, but thinks that the price is worth it:
https://newrepublic.com/post/187662/elon-musk-confession-economy-trump-victory
Elon just wants a pardon for his SEC crimes.
Better then he is part of the administration than not.
Criminals gonna crime.