Biden Administration to Revive Trump-Era Tariffs on China-made GPUs and Motherboards

[Random_User]

It will force US companies to build manufacturing at home, as well as increasing prices in our country.

But us being in control of more manufacturing / factories is a good thing, even if it costs us more. Especially as we come up to geopolitical concerns regarding China.

It won't. The companies will just find other "cheap" workforce, in some other countries, within "peoples country" proximity. As simple as that. Because many resources, including the silicon itself, mostly comes from there. No matter how much someone wants, the resource origin, and logistics have huge impact on production. So what then, apply taxes on the materials?

Another reason is the amount of products made. It will take ages, in order to achieve at least some portion of the capacities the current factories have. Even with 100% correct and corrupt-free funding and managment, with least bureaucracy delays and hurdles.

The whole situation is complete falsehood. This is simple gouging. Everybody knows, that US won't start to make all improrted stuff overnight, in-house. Not because it will get pricey. The companies already ask enormous prices, like this has been made in-house, and the workforce salaries are only the tity tiny bit of that. The true reason is:

1 The tax money will never reach the destination, e.g. the production capacities it supposed to fund, due to obvious reasons.
2 Another is (no offense but...) because the US has not enough personnel, capable of making e.g. complex electronics. And if there is, not many qualified staff, would go work in factories for lower wages.
3 And most importantly, the companies themselves won't allow this, because they will become liable, and would have to report about every step of the production and profits. Or will have to "import" "cheaper" workforce, in order to keep the margins they want. And this is entire point, why they decided to move the production overeas in the first place. They can have any margins, and yet are not accountable for anything.

The worst thing is that, since the US is the primary market for many companies, especially the CPU/GPU makers being of US origin, it will affect the prices in other countries as well. Doesn't matter, will the companies rise MSRP, in order to include higher import taxes or not. The sellers all across the globe take the US prices as an example, as base threshold, and add their margins on top of that. This is sad, but it's how this works.

China can't stop trading with the US or it would absolutely destroy their economy and probably lead to anarchy in China.

Unfortunately, this will impact China way less than the US itself. It would be tough, but they will find new markets, e.g. EU, considering the recent increased "friendship" between them.

 

[dragontamer5788]

It will force US companies to build manufacturing in the cheapest of the remaining 190 countries around the planet.

There are more than 2 options out there.

Fair enough.

I'm not against moving manufacturing out of China and into allied countries (ex: Korea, Japan, Mexico), or even neutral companies (ex: India, Vietnam, etc. etc.). Its still more expensive as we'd have to rebuild factories that China already has, but it seems worthwhile to me if we ever do get into war vs China.

Alternatively, it removes some bluster China can leverage against us in a future spat. I don't think war is inevitable, I just think war is highly likely. But even in the case of an uneasy peace over the next decade, we know that China will "Wolf-Warrior Dipolmacy" with us and try to bully their way with us and their neighbors.

Ideally, we move all of this manufacturing back home. But you're right, these tariffs don't necessarily accomplish that.

 

[ARF]

I'm not against moving manufacturing out of China and into allied countries (ex: Korea, Japan, Mexico), or even neutral companies (ex: India, Vietnam, etc. etc.).

Except that neither Mexico is allied to you, nor India and Vietnam are neutral.

Better think about the EU.

 

[kapone32]

There are reports that China are selling High Grade military electronics to the Russians to aid them in Ukraine. This is part of the US response. There were also reports of China surrounding Taiwan yesterday but you can't trust every opinion you see on Youtube.

 

[Random_User]

Don't get me wrong, Sir. There's nothing personal. Just wanted to appeal to some points.

The point is that if China is going to be a bad actor in the world, it's going to be punished for it.

How? There's nothing that prevents any country from being a bad actor. Show me at least a single example. China already supplies their "northern" neighbor with a full stack of different µ-electronics, as much as full stack of lethal weaponry, and personnel. The global "peacemaker" authorities and countries are just showing their "worriness".

They did accelerate company plans to move out of China. We are seeing massive investment in Vietnam and Mexico based production. As usual people are looking at policy as if it has an immediate impact. No, almost all policy takes time to have an impact and that impact often has a long tail.

But it didn't accelerate them to return the production back home. Everyone is so patriotic, until it comes to their sweet margins. And the governments that supposed to question these companies for their "antipatrionic" behavior, simply allow that, by descending the expences on their own citizen, leaving the companies with all profits they can have, for sweet lobbying "funding".

All countries apply some sort of surcharge on foreign products to protect domestic markets. China for example applied a 50% tariff on western cars for a long time in order to grow it's domestic car market. That figure today is much lower but in general other countries tend to accept higher export costs to developing countries because otherwise their domestic industries would be overrun.

China could do that, because they are planetary scale factory. US and EU gave up their production abilities more than fourty years ago. The EU is anemic consumer now. Most things that they have, still come from the "cheapest" eastern european countries, including the wood (that is banned for cut in "progressive" countries) and food.
Also, for how long, the companies like VAG and GM did produce the cars for Chinese domestic market, again? There's no way, that the "experience" didn't find it's implementation in own car production.

Not at home per say, that's what the CHIPs act is for. Tariffs will just encourage production anywhere but China.

"The act includes $39 billion in subsidies for chip manufacturing on U.S. soil". I know that this "source" is not very credible, but I didn't want to search for an original.
That's just pure coincedence, that some "blue" company gobbled the absolute part of it, just to later build and upgrade own foundries, used for production of own products, all across the globe.

 

[thesmokingman]

China could do that, because they are planetary scale factory. US and EU gave up their production abilities more than fourty years ago.
Also, for how long, the companies like VAG and GM did produce the cars for Chinese domestic market, again? There's no way, that the "experience" didn't find it's implementation in own car production.

Just wanted to add something ironic in regards to the insane EV tariffs, 25% of which was already existing under Trump. The world is scared of Chinese EVs apparently, but they're being racists. These Chinese EVs are literally trained by years of exposure and copy catting Tesla. It was one of the tenets behind Tesla getting specially greenlit to produce in Shanghai.

I just find it hilarious lol worthy that the Chinese took the best part is no part philosophy of Musk and executed it. Now they are crushing the EU legacy players. And Americans are sitting there going holy shart but they keep ignoring the great white in their yard, a walled garden for the Great White to feed on, lmao. Can't make this shit up.

 

[A Computer Guy]

The US is a service based economy while China is a manufacturing based economy. The US accounts for a massive part of China's economy where as the reverse is not true.

They also manufacture a lot of medicine. Good luck getting cheap generics if they decide to retaliate with increased drug pricing and any US policy against them will not withstand the backlash of citizens not being able to get their meds if China flexes this advantage especially during an election season. (sorry I was in the mood for run on sentences today)

The point is that if China is going to be a bad actor in the world, it's going to be punished for it.

I would like to know of an example of a good actor.

 

[R0H1T]

There are reports that China are selling High Grade military electronics to the Russians to aid them in Ukraine.

And then there's the Middle East ~ wait do they count?

 

[A Computer Guy]

And then there's the Middle East ~ wait do they count?

If I recall the US simply left quite a bit of military equipment and cash behind a few years ago in that general area.

 

[thesmokingman]

If I recall the US simply left quite a bit of military equipment and cash behind a few years ago in that general area.

What we should do with our ally in the arab area is tell them to pound sand give them no weapons.

 

[A Computer Guy]

My understanding is that previous tariffs were not just supposed to decrease consumers' incentive to buy from China, but also the money collected was supposed to go into a fund be used to boost local manufacturing. What happened to that money? Has it gone to Intel, TSMC, Apple, or anyone else for those purposes? Will the new tariffs collected be similarly set aside for specific purposes?

One big question I have regarding this... Will Taiwan be considered China thus tariffs applied to them as well?

 

[R0H1T]

Right I guess you forgot about the current conflict or who's selling weapons to who, also what about Yemen, Syria & before that the Gulf war? The concept of morality in geopolitics is not only outdated but an oxymoron!

 

[64K]

I would like to know of an example of a good actor.

Well, Canada doesn't usually cause much of a fuss worldwide.

 

[dragontamer5788]

Except that neither Mexico is allied to you, nor India and Vietnam are neutral.

Better think about the EU.

Mexico has close relations with USA, and a huge amount of our manufacturing goes there for good reason. Vietnam is getting closer-and-closer to ally (especially as China flexes their muscles, Vietnam is actually being pushed into USA's sphere).

India is the closest thing to neutral. No, India isn't participating with the Russian oil cap we've setup, but India is recognizing the opportunity to push their Rupee onto Russia. (IE: Russians are now forced to use Rupee for Oil, which still has huge problems to Russia). So India is just being selfish, neither collaborating with USA but also not necessarily harming us either. They're just selfish, and we can work with that. And its fair for various countries of the world to be selfish.

--------

In any case, Mexico, India, Vietnam are all excellent choices for where we can spend our outrageous amounts of money and technology to build cheap electronics, and all three would be better choices than China or further Chinese investments.

The problem here is the hypothetical war. If China closes their borders / trade with us, we need to be prepared (and they too need to prepare). We need factories that can make electronics outside of China. Electronics are a key driver of today's economy (automotive, power, industrial, machinery, technology... everything comes down to electronics these days).

And if companies like Apple or Tesla want to keep their Chinese factories, then we tax them and tax them hard. Yes, this raises prices, but at least we get "something" out of it and punish our companies who are too short-sighted to see the geopolitical problems of the next decade.

 

[A Computer Guy]

Well, Canada doesn't usually cause much of a fuss worldwide.

My Canadian side remains hopeful.

( I was thinking of this because in the past two weeks I've seen a lot of questionable listings from Canada at "too good to be true" pricing on AMD CPU's in particular and also extremely high pricing of the same CPU's also from Canada. I think there is something fishy going on there. )

 

[Random_User]

Just wanted to add something ironic in regards to the insane EV tariffs, 25% of which was already existing under Trump. The world is scared of Chinese EVs apparently, but they're being racists. These Chinese EVs are literally trained by years of exposure and copy catting Tesla. It was one of the tenets behind Tesla getting specially greenlit to produce in Shanghai.

I just find it hilarious lol worthy that the Chinese took the best part is no part philosophy of Musk and executed it. Now they are crushing the EU legacy players. And Americans are sitting there going holy shart but they keep ignoring the great white in their yard, a walled garden for the Great White to feed on, lmao. Can't make this shit up.

And Tesla is just the biggest. Plenty of others like BMW, VAG, Mersedes, etc, made the EVs there as well.

The EV have the another level problem. Because the huge amount of the electronic components still being made solely in China. Once they decide to stop export, many electronic factories of the west, if not go bust, at least will have to halt the production, until the local alternatives would catch up.

And the battery and energy sides are another separate topics. The batteries just need to have a real serious invention, or the EV will stay the expensive toys for luxury "eco supporters".
The promised Li Fe "brake-through" that was going to become the significant;y cheaper and more reliable alternative, just ended up another "premium" technology.

And maybe the electric crisis isn't very much affects the US (outside AI surge), due to abundance of nuclear power. The EU on the other hand, still has to rely on coal and other fosile sources of enery to charge the "eco-friendly" vehicles. An irony indeed.

Spoiler

There are reports that China are selling High Grade military electronics to the Russians to aid them in Ukraine. This is part of the US response. There were also reports of China surrounding Taiwan yesterday but you can't trust every opinion you see on Youtube.

I don't want to upset you, but there are plenty of new US/Taiwan/EU-made electronic components and even weaponry at their disposal as well.

 

[dragontamer5788]

And Tesla is just the biggest. Plenty of others like BMW, VAG, Mersedes, etc, made the EVs there as well.

The EV have the another level problem. Because the huge amount of the electronic components still being made solely in China. Once they decide to stop export, many electronic factories of the west, if not go bust, at least will have to halt the production, until the local alternatives would catch up.

And the battery and energy sides are another separate topics. The batteries just need to have a real serious invention, or the EV will stay the expensive toys for luxury "eco supporters".
The promised Li Fe "brake-through" that was going to become the significant;y cheaper and more reliable alternative, just ended up another "premium" technology.

And maybe the electric crisis isn't very much affects the US (outside AI surge), due to abundance of nuclear power. The EU on the other hand, still has to rely on coal and other fosile sources of enery to charge the "eco-friendly" vehicles. An irony indeed.

Arguably the EV / Battery thing is another subject. But in case people don't remember, Battery / EV tariffs were raised like a week or two ago. So all kinds of these Chinese-tariffs are hitting USA at the same time.

China has heavily invested into LiFePo4. USA and allies seem to be involved in future tech, as usual. (Specifically, Solid-state Li-ion. Which Toyota wants to invent before Toyota pushes into the EV market). With any luck, the LiFePo4 thing turns out to be a Chinese mistake. LiFePo4 is only good because of huge levels of Chinese investment (and I do admit that their chemists over there are good R&D). But if Solid State Li-ion comes in cheaper and safer, it could be key to us overtaking China's battery investments through 2030+.

 

[R0H1T]

The EV have the another level problem. Because the huge amount of the electronic components still being made solely in China. Once they decide to stop export, many electronic factories of the west, if not go bust, at least will have to halt the production, until the local alternatives would catch up.

Frankly if China didn't subsidize the sh!t out of so many components/industries to this extent we wouldn't be in this mess. Their hundreds of ghost towns are an abomination, literally! So much waste for what "GDP" numbers? Yes consumers all around the world are also responsible but come on where's your common sense?

If there's one thing they've done unquestionably wrong is to push manufacturing to such insane levels. We don't need throwaway phones every year or two nor laptops that last barely 5 years! Again not the only party to blame but they had a major part in driving consumer parts to unsustainably cheap levels in the last decade or so.

 

[dragontamer5788]

Frankly if China didn't subsidize the sh!t out of so many components/industries to this extent we wouldn't be in this mess. Their hundreds of ghost towns are an abomination, literally! So much waste for what "GDP" numbers? Yes consumers all around the world are also responsible but come on where's your common sense?

Falling Li-ion prices benefits the world. Cheap Li-ion subsidized by China isn't nominally a problem on its face IMO.

The **actual** problem is that if a war starts up in 5 years, China will be far more knowledgeable at mass-production of Li-ion (and already are better than us at low cost mass-production of electronics. Even highly sophisticated electronics like the iPhone).

If we suddenly came out to a war between our nations, China's manufacturing advantage would be key in the early days. It will take years for USA to ramp up and build our own factories, while the Chinese factories would immediately switch from peacetime Li-ions for phones/games into wartime Li-ions for Drones and other weaponry.

---------

I don't think it makes sense to use sanctions as an economic weapon. Sanctions make everything more expensive for everyone (both China and USA). But by encouraging our industry to cut ourselves off of cheap Chinese labor+electronics, we better prepare ourselves for the worst.

Accepting higher prices, but strengthening our geopolitical situation, is a good thing. I know we're all hurting from higher prices / inflation / etc. etc. already, but it would be so much worse if these higher prices hit us during wartime... rather than years ahead when we could better prepare ourselves and our budgets.

 

[R0H1T]

I'm talking about everything ~ construction, steel, mobiles, laptops, EV's including electric scooters, pharma, consumer durables et al. The one difference I can fairly easily point to is the smartphone industry, between BBK, Xioami, Huawei, Honor & a few smaller brands they control probably at least 60-70% of all global shipments. Most of these phones were uber cheap & some flagship level 10 years back but also much cheaper than Apple, Sammy, HTC, Sony or LG. With that they virtually drove out local smartphone makers out of business, especially in places like here. Now they've jacked up prices & pretty much match or exceed Samsung in some cases. Feature wise I'd say they're on par so slightly better VFM than Samsung, at the high end, or Apple but still much more expensive than what they were a decade back.

Same goes for TV's, washing machines, refrigerators etc. Can't say too much about rest of the world but that's the case here.

 

[A Computer Guy]

I'm talking about everything ~ construction, steel, mobiles, laptops, EV's including electric scooters, pharma, consumer durables et al. The one difference I can fairly easily point to is the smartphone industry, between BBK, Xioami, Huawei, Honor & a few smaller brands they control probably at least 60-70% of all global shipments. Most of these phones were uber cheap & some flagship level 10 years back but also much cheaper than Apple, Sammy, HTC, Sony or LG. With that they virtually drove out local smartphone makers out of business, especially in places like here. Now they've jacked up prices & pretty much match or exceed Samsung in some cases. Feature wise I'd say they're on par so slightly better VFM than Samsung, at the high end, or Apple but still much more expensive than what they were a decade back.

Same goes for TV's, washing machines, refrigerators etc. Can't say too much about rest of the world but that's the case here.

So basically what your saying is besides stocking up on food and toilet paper before the economic collapse that stocking on up electronics and utilities might be a good idea too?

 

[R0H1T]

Only if you can trade them for food later on

Spoiler

 

[kapone32]

And then there's the Middle East ~ wait do they count?

Iran is already under sanctions. There is some serious Calculus being applied to today's world.

 

[R0H1T]

Does the name Bibi ring a bell?

 

[kapone32]

And Tesla is just the biggest. Plenty of others like BMW, VAG, Mersedes, etc, made the EVs there as well.

The EV have the another level problem. Because the huge amount of the electronic components still being made solely in China. Once they decide to stop export, many electronic factories of the west, if not go bust, at least will have to halt the production, until the local alternatives would catch up.

And the battery and energy sides are another separate topics. The batteries just need to have a real serious invention, or the EV will stay the expensive toys for luxury "eco supporters".
The promised Li Fe "brake-through" that was going to become the significant;y cheaper and more reliable alternative, just ended up another "premium" technology.

And maybe the electric crisis isn't very much affects the US (outside AI surge), due to abundance of nuclear power. The EU on the other hand, still has to rely on coal and other fosile sources of enery to charge the "eco-friendly" vehicles. An irony indeed.

Spoiler

I don't want to upset you, but there are plenty of new US/Taiwan/EU-made electronic components and even weaponry at their disposal as well.

There are many reports with video that show Chinese EVs are actually fire hazards.