News US to increase tariffs on Chinese semiconductors by 100% in 2025 — officials say it protects the $53 billion spent on the CHIPS Act

[Admin]

The U.S. will increase import tariffs on Chinese semiconductors from 25% to 50% in 2025.

US to increase tariffs on Chinese semiconductors by 100% in 2025 — officials say it protects the $53 billion spent on the CHIPS Act : Read more

 

[-Fran-]

A new type of Chicken Tax?

Because now everyone drives a "light truck" made in the USA for sure!

Oh wait...

Regards.

 

[edzieba]

A new type of Chicken Tax?

Because now everyone drives a "light truck" made in the USA for sure!

Oh wait...

Regards.

My first though was on whether this applied to directly imported ICs only, in which case importing ICs on PCBAs and then desoldering them would be a workaround depending on margin (just like the Chicken Tax is dodged by importing 'passenger vehicles' and then removing the seats and windows). If the tax is applied to PCBAs, then that opens a MASSIVE can of works in tracing the origin and unit cost of every single IC on your board, and is likely unworkable.

 

[watzupken]

American taxpayers foot the bill for the CHIPS act and now have to face higher prices for goods. So it’s a lose lose situation. Perplexing decision.

At least get the supply sorted out before pulling off stunts like this that hurts American citizens.

 

[Notton]

The real problem with the CHIPS act is that it focuses too heavily on processors, and not DRAM.
Something like 90% of DRAM is produced in South Korea, despite Micron (USA) having 19% market share.

 

[2Be_or_Not2Be]

Yeah, the hard part of tariffs hitting consumers the most is right, because short-term capitalist greed sent all the manufacturing to China a long while ago. So the US would have rebuild quite a chunk more of manufacturing in-house again to be able to produce electronic goods in the US that might be price-competitive with tariff price-increased electronics goods imported from China. But would take a good amount of years, and I think short-term capitalist greed is just looking to move country of import, if anything.

 

[ivan_vy]

Yeah, the hard part of tariffs hitting consumers the most is right, because short-term capitalist greed sent all the manufacturing to China a long while ago. So the US would have rebuild quite a chunk more of manufacturing in-house again to be able to produce electronic goods in the US that might be price-competitive with tariff price-increased electronics goods imported from China. But would take a good amount of years, and I think short-term capitalist greed is just looking to move country of import, if anything.

and as always, consumer will pay in the end for the rebuilding of manufacturing capacity.
tariffs, tax exemptions and CHIPS act will come from tax payers.

 

[gg83]

American taxpayers foot the bill for the CHIPS act and now have to face higher prices for goods. So it’s a lose lose situation. Perplexing decision.

At least get the supply sorted out before pulling off stunts like this that hurts American citizens

Manufacturing is leaving China rapidly. Products are already being made in other countries. This actually protects the American consumer by preventing them from buying garbage products.

 

[bigdragon]

These tariff increases look to take effect prior to the CHIPS Act funding recipients getting their new production facilities up and running. The likely result is that inflation and price increases will get government policy support -- that's not good. Don't tell me you hear my complaints about price increases and corporate greed and then further enable both!!

Every company protected by the tariff increases and receiving CHIPS Act funding needs to have punitive taxes enforced against its executives and board members.

 

[slightnitpick]

It would be better to subsidize domestic purchases from these CHIPS act manufacturers instead of raising tariffs. But it's easier to raise tariffs than to raise other sorts of taxes to support a subsidy.

Manufacturing is leaving China rapidly. Products are already being made in other countries. This actually protects the American consumer by preventing them from buying garbage products.

China is more than capable of building high quality products. When they don't, it's because the US importer asks for the cheapest price, resulting in cost-cutting measures that impact quality.

What the US needs is higher standards for what is allowed to be imported into our country. Else the bad-quality merchandise is just going to come from somewhere other than China.

 

[NinoPino]

Manufacturing is leaving China rapidly. Products are already being made in other countries. This actually protects the American consumer by preventing them from buying garbage products.

Apple docet.

 

[JamesJones44]

It would be better to subsidize domestic purchases from these CHIPS act manufacturers instead of raising tariffs. But it's easier to raise tariffs than to raise other sorts of taxes to support a subsidy.

China is more than capable of building high quality products. When they don't, it's because the US importer asks for the cheapest price, resulting in cost-cutting measures that impact quality.

What the US needs is higher standards for what is allowed to be imported into our country. Else the bad-quality merchandise is just going to come from somewhere other than China.

This is too over focused on the US, the US is not the only consumer of Chinese manufacturing by a long shot. The statement should really be; when the developed world asks for cheap crap from China, they get cheap crap. When they ask and pay for high quality items, they get high quality items.

 

[thestryker]

It would be better to subsidize domestic purchases from these CHIPS act manufacturers instead of raising tariffs. But it's easier to raise tariffs than to raise other sorts of taxes to support a subsidy.

You're exactly right, because tariffs don't require congress, and at the end of the day that's why this happens.

I'd rail about the stupidity that got us here, but that's generally frowned upon as it's all on congress.

 

[ivan_vy]

These tariff increases look to take effect prior to the CHIPS Act funding recipients getting their new production facilities up and running. The likely result is that inflation and price increases will get government policy support -- that's not good. Don't tell me you hear my complaints about price increases and corporate greed and then further enable both!!

Every company protected by the tariff increases and receiving CHIPS Act funding needs to have punitive taxes enforced against its executives and board members.

exactly, the funding need to be tied to facilities, equipment, wages, etc, preventing to be part of salary, bonuses and the like for CEOs.

 

[watzupken]

Manufacturing is leaving China rapidly. Products are already being made in other countries. This actually protects the American consumer by preventing them from buying garbage products.

You really think so? There’s been efforts to move production out of China for sure, though I don’t believe it’s making a significant impact. I am not sure if your definition of “garbage” means poor quality, and if so, you pay peanuts you get monkeys. American corporates don’t setup shop or ask for help to manufacture to give you the best quality goods. It’s in fact contrary to keep cost as low as possible. So what would you expect? And China has become the expert of producing low cost products.

 

[DavidLejdar]

More than 10 years ago in Europe, there have been some discussions about whether it makes sense to have business with a government, which seemed to lack in respect for human rights. That topic went under, because profit and stuff. And as it turns out, might have been worth the effort to first have a serious international debate about human rights (and also about international system of law, which doesn't move borders based on who scares who the most), instead of hoping that a bit of wealth will not fuel imperialist ambitions, huh?

Personally, I still think that there should be a shift in foreign and trade policy, to firstly work with societies, which stand for a modern civilized world, even if that may perhaps not be as great a deal as with some shady dictator in Africa. At least in case of Prussia, e.g. helping a partner in Africa getting cold warehouses running (something, which is a rarity in some regions), that could be done with some equipment from here (ergo even helping local population with jobs), while helping the population there with sustenance and perhaps even within years so much economic growth (including exports), that the folks there can afford some imports themselves, such as from Prussia.

 

[slightnitpick]

This is too over focused on the US, the US is not the only consumer of Chinese manufacturing by a long shot. The statement should really be; when the developed world asks for cheap crap from China, they get cheap crap. When they ask and pay for high quality items, they get high quality items.

When it comes to developed countries the US is particularly bad at allowing crappy imports.

 

[parkerthon]

These tariff increases look to take effect prior to the CHIPS Act funding recipients getting their new production facilities up and running. The likely result is that inflation and price increases will get government policy support -- that's not good. Don't tell me you hear my complaints about price increases and corporate greed and then further enable both!!

Every company protected by the tariff increases and receiving CHIPS Act funding needs to have punitive taxes enforced against its executives and board members.

China is about to absolutely spew cheap low quality chips all over the globe alongside a handful of other products because their government basically pays workers to churn them out even though there isn’t enough demand. They dump that government subsidized product on other countries and basically shock the domestic manufacturing market so hard everyone goes out of business. The list of examples where they have done this is long. It’s like the first page in their economic playbook at this point. It’s not necessarily intended to be hostile. This is a communist country with a centrally controlled economy and this “overcapacity”, as they call it, is a symptom of what they do during an economic downturn. It’s still 100% intentional in that they take market control in the aftermath(and prices go back up, but not enough to allow domestic manufacturers to reestablish themselves). The US does this with exported agricultural products btw. Maybe less intentionally, but we subsidize the hell out of agriculture.

I dislike tariffs but the permanent damage Chinese dumping events did to our economy is very clear. I also loathe protectionism. It’s just in this latest case, it’s not just about blunting competition, but protecting against extreme market manipulation. Tariffs are unfortunately just very crude tools for enforcement and will inevitably cause some inflation and artificially high prices which is bad.

Still there’s also everything else that China does. Trading with them right now is just difficult and they have brought a lot of that on themselves with their policies. We aren’t the only country reevaluating our trade with them specifically. This is unfortunate as trade helps maintain peaceful relations and war would be ruinous.

 

[slightnitpick]

The US does this with exported agricultural products btw. Maybe less intentionally, but we subsidize the hell out of agriculture.

Yeah, people complain about Mexican laborers crossing the border but US agricultural subsidies and dumping massacred the Mexican farmer over the last few decades. I don't think people really know about this, though.

How NAFTA Failed Mexico

prospect.org

The Mexican government promised that as tariffs on U.S. agriculture products fell, generous financial and technical assistance would enable small farms to increase their productivity in order to meet the new competition. But, after the treaty was signed, the reformers pulled the rug out from under the rural peasantry. Funding for farm programs dropped from $2 billion in 1994 to $500 million by 2000.

Meanwhile, the U.S. Congress massively increased subsidies for corn, wheat, livestock, dairy products and other farm products exported to Mexico. American farmers now receive 7.5 to 12 times more in government help than Mexican farmers do. This "comparative advantage" enabled U.S. agribusiness to blow thousands of Mexican farmers out of their own markets.

This is unfortunate as trade helps maintain peaceful relations and war would be ruinous.

Though as seen with the Mexican farmer and NAFTA, sometimes the trade helps maintain peaceful relations by enriching the rich of both countries at the expense of the former middle class.

 

[DS426]

American taxpayers foot the bill for the CHIPS act and now have to face higher prices for goods. So it’s a lose lose situation. Perplexing decision.

At least get the supply sorted out before pulling off stunts like this that hurts American citizens.

Perplexing? What mammoth government is ran efficiently? Or supposedly "for the people"??

Intel gets basically a ~$8.5 billion bailout for their decade of fab failures while AMD fought hard -- the engineering way -- to get to where they are today as a fabless microprocessor powerhouse. Actually, Intel pays good dividends to shareholders, so isn't this also indirectly enriching the already well-to-do? I don't say this to be an AMD sympathisizer but really, is this sort of thing promoting and healthy for competition and fair markets? The answer is clear but it's always easier to bury heads in the sand, and not just AMD but a dozen+ other fabless designers and fab foundries that get shafted. Maybe it's just that some won't make the headline articles, but if you do the math... there's definitely not much left for them.

It gets more perplexing and perhaps more disturbing the more you think about the full array of knock-on effects, winners and losers, and so on. Let's be clear though and without getting into politics too much, $34 trillion in U.S. federal debt shows that fiscal responsibility is long gone, somehow continuing to fool taxpayers with this idea that x amount of dollars invested now in these programs will pay off x-fold in the future. No, interest on debt is the x-fold factor for future generations. Yes, we needed to decrease our reliance on China, but it's becoming more of a superpower pi**ing match than anything else.

 

[Don Frenser]

I have been avoiding american brand as much as possible the past 9 years. I will be stricter even more in the future. And as soon as RiscV is viable I will be rid of even more american manufacturers.

 

[Don Frenser]

Manufacturing is leaving China rapidly. Products are already being made in other countries. This actually protects the American consumer by preventing them from buying garbage products.

Many brands find a cheaper place to make things. China is no longer cheap.

And did you miss the part where it says that Ford is not really selling their favorite f150 like hot cakes anymore as they have huge quality problems.

 

[t3t4]

More stupidity from the children that think they know how to run a country.

 

[gg83]

Apple docet.

Apple has pulled out more than any other big company. Something like 30% of apple products are from India and that will only grow.

 

[slightnitpick]

Apple has pulled out more than any other big company. Something like 30% of apple products are from India and that will only grow.

It took me a bit because "docet" is not a word typically used in English, but I believe "Apple docet" translates to "As Apple is demonstrating".
https://en.wiktionary.org/wiki/docet

1. third-person singular present active indicative of doceō

https://en.wiktionary.org/wiki/doceo#Latin

1. to teach, instruct; tell, inform; show, demonstrate