News Trump to impose 25% to 100% tariffs on Taiwan-made chips, impacting TSMC

[Flayed]

Speaking of which, tariffs aren't a formal power of the President - they're presently being done via emergency powers, which is also something Congress could pass a bill to revoke.

Thanks for that I needed a good laugh

 

[George³]

It's intentionally vague. We'll have to wait and see. My guess is that it's an opening position and the final amount of the tariffs will be less, in order to seem slightly more reasonable.

It's also a fair bet that he's trying to negotiate something, at least in part. I'm not entirely sure if the target is Taiwan or actually its biggest customers, though. Threatening tariffs is a bit like gambling with someone else's money. It's great, at first...

The tariff are thing that isn't be officialise without US Congress ratification.

 

[The Historical Fidelity]

What about Texas Instruments? AMD? National Semiconductor?... All IC design companies gave up and outsourced the foundry part of their business to TSMC. Cost became unsustainable below 90 nm.
Intel was more a victim of its arrogance than scammers; they ve been so many time right (remember them versus the world for the "gate last versus gate first" 28 nm process) and for so long lead the race at an impressive pace.
Clinton told blue collars; "i don't care about you job; i care about you as an American; we ll find you another job". For years, US industry has been bleeding because of the corporate greed, blessed by the US government.
Only issue with tariffs is that cost for the consumer tends to increase without necessarily improving on quality. But at least, "some" US citizens have some jobs....

Texas Instruments? They have all domestic chip fabs in the USA, mostly in Texas

 

[bit_user]

I’ve said for years take away the IRS and have no taxes at least federally coming from your paycheck then instead have a federal sales tax.

Lots of countries have a national sales tax (usually called a VAT). There's been lots of scholarship on the matter, so we don't have to guess how it'd play out.

One thing that's bad about sales tax is that it's regressive. It disproportionately affects the people who can least afford it. Of course, you can start to put carve-outs on some basic essentials, but then you need to increase the rate on everything else, and it acts like friction in the economy. In increases the resistance to buy things, because stuff is suddenly much more expensive. Any reduction in economic activity (i.e. buying & selling stuff) is generally considered by economists to be bad.

That said, I don't totally hate the idea. Income taxes are broken, because rich individuals & corporations bought loopholes in the tax code and aren't paying their fair share. So, something has to give.

if I’ve got no federal taxes coming from my check and instead pay say a 10-15% extra sales tax on goods I buy, I’m good with that.

I don't know why you would expect your total tax burden to go down. You'd probably pay a similar amount, just in a different way.

Dang! I was hoping things might become cheaper for people outside the US. Some hope eh? I look at the "bargains" on Tom's priced in dollars and they're double the price at my local Amazon.

And I'm sure some of that is due to your country's VAT. What the rate?

I’m of the opinion as well that there are probably a lot more expenses that can be cut as well.

It'd be a good idea to educate yourself about that. Non-defense discretionary spending is only 15% of last year's budget. That includes all sorts of essential services, like the FAA, DOJ, NIST, DOT (which manages ports and pipelines, not only highways), DHS (including border enforcement), etc, not to mention stuff like NASA and NSF that ultimately give back much more to the economy than they cost. That amount can't be reduced to zero and even if it were, it's only 1/6th of all Federal spending.

https://www.cbo.gov/publication/59729
​

 

[aldaia]

Dang! I was hoping things might become cheaper for people outside the US. Some hope eh? I look at the "bargains" on Tom's priced in dollars and they're double the price at my local Amazon.

Don't loose your faith. During tariffs war 1.0 things like Japanese motorbikes become cheaper in Europe.
I truly expect that tariffs war 2.0 brings us cheaper electronic components.

 

[bit_user]

What about Texas Instruments? AMD? National Semiconductor?... All IC design companies gave up and outsourced the foundry part of their business to TSMC.

AMD used Global Foundries, until its owners decided to stop investing in developing new nodes and instead just milk what they already had. AMD basically had no choice but to switch. In fact, I think they even had to buy out some of their contracts to source wafers from GloFo, since AMD was at a point where it needed 7 nm, which is the node GloFo cancelled.

Some governments wouldn't have sat by idly and let such a thing happen. Asian governments are, in general, very good about maintaining incentives for their industries to achieve or maintain technological dominance.

 

[The Historical Fidelity]

Lots of countries have a national sales tax (usually called a VAT). There's been lots of scholarship on the matter, so we don't have to guess how it'd play out.

One thing that's bad about sales tax is that it's regressive. It disproportionately affects the people who can least afford it. Of course, you can start to put carve-outs on some basic essentials, but then you need to increase the rate on everything else, and it acts like friction in the economy. In increases the resistance to buy things, because stuff is suddenly much more expensive.

That said, I don't totally hate the idea. Income taxes are broken, because rich individuals & corporations bought loopholes in the tax code and aren't paying their fair share. So, something has to give.


I don't know why you would expect your total tax burden to go down. You'd probably pay a similar amount, just in a different way.


And I'm sure some of that is due to your country's VAT. What the rate?


It'd be a good idea to educate yourself about that. Non-defense discretionary spending is only 15% of last year's budget. That includes all sorts of essential services, like the FAA, DOJ, NIST, DOT (which manages ports and pipelines, not only highways), DHS (including border enforcement), etc, not to mention stuff like NASA and NSF that ultimately give back much more to the economy than they cost. That amount can't be reduced to zero and even if it were, it's only 1/6th of all Federal spending.

​

https://www.cbo.gov/publication/59729​

​

Totally agree with you on sales tax being a burden on lower income folks.

It works for Texas since we produce a lot of oil and refine the majority of gas/diesel for the U.S. market so our gas prices are dirt cheap before tax (since there’s only minimal distribution and transportation costs, etc) so we have very high fuel tax rates yet still maintain some of the lowest gas pump prices in the country. We also sin tax alcohol and tobacco more than other states…

The moral of the story is you have to have a taxable market with prices well below national averages that you can substantially tax to minimize sales tax burden. Texas state sales tax is 8.025% which is interestingly lower than many states that have both sales and income taxes. Even our property taxes, although high, are less than some states.

 

[Gaidax]

Yeah, and how are those Brazilian tariffs benefiting you? Are there any bleeding edge fabs popping up in Brazil?

It allowed them to build a massive production industry and become no.1 South American exporter by a mile.

Tariffs are used as an incentive to grow your own industry, which in turn can lead to massive benefits in the long run. It also gives a measure of protection for the infant local manufacturing and time to become naturally competitive with outside competitors, at which point tariffs are relaxed or dropped.

It's not some crazy new approach. There is a lot of merit to this.

 

[edzieba]

So rather than encouraging manufacturers to move production to CONUS via incentives (making US produced products competitive with products produced elsewhere), instead he's making products produced elsewhere more expensive... for Americans only. This does not incentivise manufacturers to move to the US, but instead incentivises them to sell their existing production to countries that are not the US to make up the lost sales volumes. "But we'll sanction you!" is not an effective disincentive if you have already applied more punitive sanctions to start with.

Well in Texas, there’s no income tax, only property owners pay property tax, renters/leasers have no tax, and necessities like grocery store & pharmacy purchases are tax free. It works out pretty well.

Whilst that sounds like a good idea at first glance, in practice Texas is not the low-tax haven thought, and ends up being a more regressive taxation system. The key issue is that progressive income taxes scale upwards with income, but property and sales taxes have pretty hard floors: below a certain minimum you simply do not have a property, and below a certain minimum purchases you are starving. You can compensate with income taxation by setting minimum thresholds (e.g. 0% tax on income below $x0,000) and increasing taxation rates as income increases. This is not practical with sales taxes: you cannot apply varying levels of taxation at point of sale per-customer based on household income or assessed total holdings.

 

[aldaia]

It allowed them to build a massive production industry and become no.1 South American exporter by a mile.

Tariffs are used as an incentive to grow your own industry, which in turn can lead to massive benefits in the long run. It also gives a measure of protection for the infant local manufacturing and time to become naturally competitive with outside competitors, at which point tariffs are relaxed or dropped.

It's not some crazy new approach. There is a lot of merit to this.

Argentina high tariffs since the 1960s have not helped them to grow a strong local industry. Quite the opposite.

I'll look for the reasons of Brazil economic growth somewhere else. High population growth and cheap labor are usually a better explanation.

 

[aldaia]

So rather than encouraging manufacturers to move production to CONUS via incentives (making US produced products competitive with products produced elsewhere), instead he's making products produced elsewhere more expensive... for Americans only. This does not incentivise manufacturers to move to the US, but instead incentivises them to sell their existing production to countries that are not the US to make up the lost sales volumes. "But we'll sanction you!" is not an effective disincentive if you have already applied more punitive sanctions to start with.

Tariffs are like a boomerang, they come back to you with unexpected consequences. They can even encourage production to move OUT of the country.

During the previous tariffs war, US increased tariffs on Steel and aluminum. EU retaliated by increasing tariffs to American motorbikes (Harley, Indian, ...), and at the same time lowered tariffs on Japanese made Motorbikes.

Therefore, Trump's tariffs hurt Harley-Davidson when it comes to manufacturing, because the increased cost on raw materials , and the European tariffs hurt Harley-Davidson when it comes to selling. Logically, the Milwaukee manufacturer announced to divert production destined for Europe to factories that were already located outside the United States, in Thailand, Brazil and India.

 

[spongiemaster]

Well in Texas, there’s no income tax, only property owners pay property tax, renters/leasers have no tax, and necessities like grocery store & pharmacy purchases are tax free. It works out pretty well.

Did you read his post? He specifically singled out gas and groceries as two things that would be taxed. Ohio doesn't seem to be aware there already is a federal gas tax of 18.5 cents per gallon, adding on 10-15%, we'd be looking at a 15-20+% tax rate depending on the cost of gas. I'm use what tax rate Texas implemented, it wasn't 10-15% and I'm sure that plan didn't replace a 0% tax on everything within the last few years. Low income families don't pay federal income taxes currently, if a 10-15% sales tax was added next year, that would be a direct deduction from the their pay they didn't have before. There is no comparison here to what Texas is doing.

 

[J4ck1nth3b0x]

once Denmark slaps export taxes on ASML machines (esp. if this Greenland business escalates)

Why is it that everybody in the US mistakenly thinks the Dutch are from Denmark, it's becoming hilarious. We're the Dutch from the Netherlands not from Denmark. ASML is a 100% Dutch company so from the Netherlands, Denmark makes delicious cookies and LEGO, however there's one thing that can add to the confusion; both countries have beautiful tall blond women with blue eyes.