President Donald Trump says he's imposing a 100% tariff on computer chips— a move that raises the specter of higher prices for electronics, autos, household appliances and other essential goods that depend on the processors.
It’s a tax of 100% on chips being imported to the USA, having been manufactured elsewhere. The idea is that it should force companies to set up their own chip manufacturing in the USA. But that’s expensive and slow to do, and requires a lot of specialized engineering talent, so US-based electronics companies will somehow have to survive through years of paying twice as much for the chips they build into their products. This will mean significant price increases for Americans buying electronics, as the unavoidable costs are passed on.
Expecting companies to build their own chip foundries and manufacture their own chips to avoid tariffs is as unrealistic as expecting poor people to singlehandedly use nuclear fission to create atoms from nothing to materialize into existence all the food they can’t afford. Even if these American “use AI for everything” megacorp regimes that can’t even write a mouse driver that’s under 1gb actually put their big swingin’ dicks back into their pants long enough to actually figure out how they could be efficient enough use the more achievable 90nm and 65nm chips, even that is so unachievable they’d never find a way to mass produce them affordably. Russia supposedly managed to diy their own 350nm chips which is barely even mid 90s Pentium 1 era bullshit and even that’s probably fake propaganda that, best case, followed some half successful low volume experiments in a lab.
The only purpose of this is to cause mass calamity and force people further into poverty while corporations have an excuse to make everything even more expensive without giving anything back to society in return.
The comments were Trump’s strongest criticism of the bipartisan CHIPS Act to date. “We don’t have to give them money,” Trump said, suggesting that avoiding new tariffs would be enough to convince them to build U.S. factories.
I think that, insofar as Trump has a coherent view, that’s it: he doesn’t want to give companies money to establish chip manufacturing in the USA, because he thinks it can be done instead by bullying them with tariffs so they are forced to fund it themselves if they want to stay in business.
I’m not saying that’s a wise view. There’s a good chance he just ends up creating more economic problems at home. And it’s in part driven by his desire to get revenge on Biden by undoing everything he did, rather than a rational appraisal of economics.
It’s a tax of 100% on chips being imported to the USA, having been manufactured elsewhere. The idea is that it should force companies to set up their own chip manufacturing in the USA. But that’s expensive and slow to do, and requires a lot of specialized engineering talent, so US-based electronics companies will somehow have to survive through years of paying twice as much for the chips they build into their products. This will mean significant price increases for Americans buying electronics, as the unavoidable costs are passed on.
Expecting companies to build their own chip foundries and manufacture their own chips to avoid tariffs is as unrealistic as expecting poor people to singlehandedly use nuclear fission to create atoms from nothing to materialize into existence all the food they can’t afford. Even if these American “use AI for everything” megacorp regimes that can’t even write a mouse driver that’s under 1gb actually put their big swingin’ dicks back into their pants long enough to actually figure out how they could be efficient enough use the more achievable 90nm and 65nm chips, even that is so unachievable they’d never find a way to mass produce them affordably. Russia supposedly managed to diy their own 350nm chips which is barely even mid 90s Pentium 1 era bullshit and even that’s probably fake propaganda that, best case, followed some half successful low volume experiments in a lab.
The only purpose of this is to cause mass calamity and force people further into poverty while corporations have an excuse to make everything even more expensive without giving anything back to society in return.
He’s been trying to prevent the US from manufacturing their own chips, so that can’t be the real goal…
https://www.reuters.com/technology/trump-wants-kill-527-billion-semiconductor-chips-subsidy-law-2025-03-05/
From that article:
I think that, insofar as Trump has a coherent view, that’s it: he doesn’t want to give companies money to establish chip manufacturing in the USA, because he thinks it can be done instead by bullying them with tariffs so they are forced to fund it themselves if they want to stay in business.
I’m not saying that’s a wise view. There’s a good chance he just ends up creating more economic problems at home. And it’s in part driven by his desire to get revenge on Biden by undoing everything he did, rather than a rational appraisal of economics.