It's not what I say, it's what everyone says because it's objective reality. Intel is irrelevant in mobile, irrelevant in AI, and increasingly irrelevant in PCs. Here's one of many recent articles about the fall of Intel.
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'Made in America' Apple Silicon to Lag Behind Taiwan's Output
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It's not what I say, it's what everyone says because it's objective reality. Intel is irrelevant in mobile, irrelevant in AI, and increasingly irrelevant in PCs. Here's one of many recent articles about the fall of Intel.
Well, when Intel applied for that chipsact money they were still highly profitable.
And they wanted to build new fabs fully knowing that they could not fill their existing fabs.
Sure, that the U.S. has the highest debt rate is just a myth…
If Intel is as irrelevant as you say - why did they get billions from the chips act?
Because they're based in the US and the gov't wants them to succeed to reduce our reliance on Taiwan. This isn't hard to grasp.
It’s cheaper for companies to manufacture overseas. If they are forced to relocate back to the US that will inevitably result in higher prices. I don’t necessarily have a problem with that but we have to be prepared for that eventuality.
Have they been though? The Europeans are exceptionally fond of VATs which are charged to an import just like a tariff a tariff would be. Yes I know there is a lot of arguing the opposite, that VATs apply to all sales, however, domestic producers get to deduct that VAT already paid by previous stages. Importers don't.
"To calculate the amount of value added tax that must be paid at each stage, take the VAT amount at the latest stage of production and subtract the VAT that's already been paid. It prevents double taxation and ensures that buyers at each stage get reimbursed for the VAT they've previously paid."
It's pretty muddy.
Some people seem to have forgotten who exactly passed the CHIPS act…
Not surprising given their tenuous grasp on reality.
In any case, this shouldn’t be a surprise if you look at the facts. America is still the second largest manufacturer of goods globally, and only outcompeted by China because of sheer economies of scale in certain industries.
American manufacturing typically involves things that simply require high degrees of automation, precision, and/or are just uneconomical to ship across the seas.
But it’s understandable that people get the impression that “nothing is made here anymore” when most consumer goods are manufactured overseas. Even if many infrastructure and industrial critical things are made in their backyard.
Not surprising given their tenuous grasp on reality.
In any case, this shouldn’t be a surprise if you look at the facts. America is still the second largest manufacturer of goods globally, and only outcompeted by China because of sheer economies of scale in certain industries.
American manufacturing typically involves things that simply require high degrees of automation, precision, and/or are just uneconomical to ship across the seas.
But it’s understandable that people get the impression that “nothing is made here anymore” when most consumer goods are manufactured overseas. Even if many infrastructure and industrial critical things are made in their backyard.
In sane economics tariffs are typically employed in a few sectors that the country in question is specialized in.
Not blanket applied across all goods.
Adam Smith had this figured out in the 18th century.
Normally this is where I would chime in and say that it’s typically legal immigrants that work in these sectors.
But the current administration doesn’t distinguish between legal and illegal.
This. The summary says the factory isn't even going to be producing till 2028 and then it's going to be years old chips. Are Americans really the target customers for these products?
VAT is our Sales tax. It only gets paid by the final purchaser of the goods.
Although the rates are different it works the same as Sales tax in the USA. The only difference is that Europeans include vat in the sale price, Americans leave it until the till.
Import taxes and duties are completely different to sales taxes. The consumer pays them to their government.
Indiscriminate tariffs with numbers pulled out of orifices will only ever harm all importers and exporters.
VAT is charged at the point of sale and paid by the person buying the goods. It’s a sales tax not a tariff.
I’m not American but it’ll be an interesting business school case as to why and how TMSC leap frogged Silicon Valley.
It seems crazy that trillions of dollars of value in the USA are dependent on a very vulnerable island just off china.
Intel keeps on doubling down on x86 for some reason when it’s obviously the past.
I think it should swallow its pride and go RISC / ARM.
It seems crazy that trillions of dollars of value in the USA are dependent on a very vulnerable island just off china.
Intel keeps on doubling down on x86 for some reason when it’s obviously the past.
I think it should swallow its pride and go RISC / ARM.
They do!
A US and a European manufacturing company manufactures some goods which they sell for $100 before taxes. Both of them sell their products to a store in Europe. I'm using a VAT rate of 25%.
Scenario 1 (US company pays VAT)
US manufacturer Inc charges: $100 + $25 VAT
EU store pays: $125 of which $25 is VAT
EU store sells to consumer with a 10% profit: $110 * 1,1 + $27,50 (VAT) = $137,50
Both companies has to report and pay the VAT they collected and receive the VAT they payed:
US manufacturer: $25 paid to the EU state
EU store: $27,50 (collected) - $25 (paid) = $2,50 paid to the EU state
Effectively both companies paid $0 in VAT.
The consumer paid $27,50 in VAT.
The state collected $27,50 in VAT.
Scenario 2 (US company doesn't pay VAT)
US manufacturer Inc charges: $100
EU store pays: $100 of which $0 is VAT
EU store sells to consumer with a 10% profit: $110 * 1,1 + $27,50 (VAT) = $137,50
Both companies has to report and pay the VAT they collected and receive the VAT they payed:
US manufacturer: $0 paid to the EU state
EU store: $27,50 (collected) = $27,50 paid to the EU state
Effectively both companies paid $0 in VAT.
The consumer paid $27,50 in VAT.
The state collected $27,50 in VAT.
Scenario 3 (EU manufacturer pays VAY)
EU manufacturer charges: $100 + $25 VAT
EU store pays: $125 of which $25 is VAT
EU store sells to consumer with a 10% profit: $110 * 1,1 + $27,50 (VAT) = $137,50
Both companies has to report and pay the VAT they collected and receive the VAT they payed:
EU manufacturer: $25 paid to the EU state
EU store: $27,50 (collected) - $25 (paid) = $2,50 paid to the EU state
Effectively both companies paid $0 in VAT.
The consumer paid $27,50 in VAT.
The state collected $27,50 in VAT.
It is genuinely funny and disturbing both at the same time how you believe all that what you wrote.
Worth noting that the caveat there is “in this space”. The US is still the 2nd largest manufacturer in the world (there’s a lot of caveats to that too, mind you, but it is worth bearing in mind that there is still a lot of manufacturing capacity here).
Now whether we’re still a big manufacturer after Trump takes a wrecking ball to all the research funding that keeps us competitive in the spaces we are big manufacturers in… or for that matter the complex web of supply chains that feed that capacity… that’s another question entirely
I called this in a previous thread.
It's an extremely expensive way to get on America's good side. That said, TSMC has to diversify its manufacturing capacity and there is a willing (though not necessarily able based on hiring) workforce in Arizona. TSMC is bringing in a huge Taiwan national workforce to get the first fab moving. That will surely apply to the second fab as TSMC maintains its process lead over competitors. Living in AZ, I'm more worried about running out of water or severe rationing (Colorado River Compact) before the third fab is built.
It's an extremely expensive way to get on America's good side. That said, TSMC has to diversify its manufacturing capacity and there is a willing (though not necessarily able based on hiring) workforce in Arizona. TSMC is bringing in a huge Taiwan national workforce to get the first fab moving. That will surely apply to the second fab as TSMC maintains its process lead over competitors. Living in AZ, I'm more worried about running out of water or severe rationing (Colorado River Compact) before the third fab is built.
Australias tariffs are mostly 5%, so barely noticeable for the consumer, and not sure whether it's about protecting jobs or some other reason.
What happens when those countries retaliate with their own tariffs against US goods? Will those US companies be forced to move their manufacturing to the other countries to avoid their tariffs. It’s a circular argument that will end with higher prices and a global recession.
A much better solution is to have no tariffs at all. That way the consumer decides which companies thrive and which die.
The Taiwanese want to appease Don, but they're not stupid.
The US does the same with weapons: it sells many to other countries but keeps the most advanced to itself.
The US does the same with weapons: it sells many to other countries but keeps the most advanced to itself.
Can dictator Donald use tariffs to force TSMC to make US plants top tier? I recall the original issue that gave Donald the ability to rule by tariff was the fentanyl excuse at the US/Canada border. He could use some kind of emergency law to implement tariffs on Canada. The fentanyl excuse has been left in the dust and now he's using tariffs whenever he feels like it because the current reason is to bring manufacturing back to the US. Donald is applying tariffs on Europe, on China, on Mexico, on Canada,...why? It's obviously not about fentanyl. Can a US President use tariffs whenever he feels like it or does the tariffs threat have to go through congress and Donald is basically overstepping Presidential authority?
Don't worry, I believe the great Trump — who so perfectly represents the will of all Americans — will make sure Taiwan pays the price it rightfully deserves, as always.