US 50% China Semiconductor Tariff

[soldar]

30 years ago those chips were made in the US, instead of China... created jobs, boosted the US economy... The IC designs were later stolen by china and built in sweat shops, then sold to US companies at such low prices that the US companies were driven out of business.
This is not the only market that china has overtaken this way. And when you hurt the market in any country, it's a national security threat for that country. Because less market dominance leads to a weaker country.
China itself does very little in terms of RnD when it comes to IC's. Most of the designs are still mostly designed in the US, then outsourced to Taiwan, and sometimes those designs get stolen.
Also since pretty much every single chip comes from China and Taiwan, if and when china invades taiwan they would have total market dominance. And could crash markets worldwide.
So tariffs like this give back competitiveness to companies outside of china, giving incentive to build those factories. Reducing market dominance in china.
And the reason why the market dominance of china is a problem is because they're hostile against the free world. No one is worried about Taiwan having such market dominance because Taiwan doesn't take over markets in other countries and repeat the dream of world domination.
If people would just sit back and enjoy the success of someone else, then someone else without that mentality would take over everything. You can't just sit back and let monopolies grow forever

This post is 100% political so I will not give it the reply it deserves. It is 100% BS.

[2N3055]

Quite frankly, whole topic IS political. Others also made political comments.

As for practical side, these are not sanctions (yet?). So everything is still available, but more expensive.
Fact is that even with tariffs, it is still less expensive for many things to get them from China.
So all that will change is price increase for end consumer..
Which will end up in less sales, (because of political reasons) purchasing power of consumers in USA is not able to follow price increase.

This kind of interventionism is simply form of monopolism. When you cannot compete (because you are not capable to actually make better products at lower prices then competition) you punish your own people by forcing them to buy your inferior, expensive products.
It is policy that short term benefits some manufacturers that sell "have to have" products, and hurts everybody else...

Investing in industry and production capacity that would really be competitive is the right way to do it.
But that would need changes in society....

[ELS122]

Quite frankly, whole topic IS political. Others also made political comments.

As for practical side, these are not sanctions (yet?). So everything is still available, but more expensive.
Fact is that even with tariffs, it is still less expensive for many things to get them from China.
So all that will change is price increase for end consumer..
Which will end up in less sales, (because of political reasons) purchasing power of consumers in USA is not able to follow price increase.

This kind of interventionism is simply form of monopolism. When you cannot compete (because you are not capable to actually make better products at lower prices then competition) you punish your own people by forcing them to buy your inferior, expensive products.
It is policy that short term benefits some manufacturers that sell "have to have" products, and hurts everybody else...

Investing in industry and production capacity that would really be competitive is the right way to do it.
But that would need changes in society....

Well I'm for putting whatever the tariffs are on china until other companies from other nations (and domestic) can compete. I wouldn't trade job outsourcing, infrastructure weakening, and reliance on a foreign adversary, just for a 50$ phone...
I dont see how putting tariffs on a dominant market is monopolism. And if you want to say it's just an excuse for more taxes, Then why would they put 100% tariffs on BYD? If it was just to tax goods and not to build infrastructure they wouldnt ban selling BYD cars.

[ELS122]

Good luck with that one, seems very short sighted to me.
They may be able to wack a tariff on direct semiconductors from china, but any company needing a chinese device will find a way around it. Simply import through another country.
If the tariff is phrased as "of chinese origin", then define "chinese origin". Here in the UK "country of origin is defined as the last country that major work was performed on, so if a kit was produced in the UK that contained a chinese semiconductor, then the country of origin of that kit is the UK.
Then again, companies could just shift their manufacturing overseas.
It all depends on the exact wording.

Sanction/tariff circumvention is illegal. Unfortunately it's not actively enforced.

[2N3055]

Quite frankly, whole topic IS political. Others also made political comments.

As for practical side, these are not sanctions (yet?). So everything is still available, but more expensive.
Fact is that even with tariffs, it is still less expensive for many things to get them from China.
So all that will change is price increase for end consumer..
Which will end up in less sales, (because of political reasons) purchasing power of consumers in USA is not able to follow price increase.

This kind of interventionism is simply form of monopolism. When you cannot compete (because you are not capable to actually make better products at lower prices then competition) you punish your own people by forcing them to buy your inferior, expensive products.
It is policy that short term benefits some manufacturers that sell "have to have" products, and hurts everybody else...

Investing in industry and production capacity that would really be competitive is the right way to do it.
But that would need changes in society....

Well I'm for putting whatever the tariffs are on china until other companies from other nations (and domestic) can compete. I wouldn't trade job outsourcing, infrastructure weakening, and reliance on a foreign adversary, just for a 50$ phone...
I dont see how putting tariffs on a dominant market is monopolism. And if you want to say it's just an excuse for more taxes, Then why would they put 100% tariffs on BYD? If it was just to tax goods and not to build infrastructure they wouldnt ban selling BYD cars.

You should read a book or two and educate yourself from sources other than Murica propaganda before writing on geopolitical issues.

Short version? USA companies are greedy and workforce is spoiled in comparison to the rest of the world. So same thing cost 3x times more.  Same thing with EU.

Chinese (or any other nation) are not the reason for that. Problem is at home...

[soldar]

Well I'm for putting whatever the tariffs are on china until other companies from other nations (and domestic) can compete. I wouldn't trade job outsourcing, infrastructure weakening, and reliance on a foreign adversary, just for a 50$ phone...
I dont see how putting tariffs on a dominant market is monopolism. And if you want to say it's just an excuse for more taxes, Then why would they put 100% tariffs on BYD? If it was just to tax goods and not to build infrastructure they wouldnt ban selling BYD cars.

You should read a book or two and educate yourself from sources other than Murica propaganda before writing on geopolitical issues.

Short version? USA companies are greedy and workforce is spoiled in comparison to the rest of the world. So same thing cost 3x times more.  Same thing with EU.

Chinese (or any other nation) are not the reason for that. Problem is at home...

I agree. no country became rich by protectionism. The only result of protectionism is that the people pay higher prices for inferior products.

Countries need to be competitive. That is how countries got rich. By exporting. And countries that tried to stop those imports with tariffs only got poorer, not richer.

[ELS122]

Chinese (or any other nation) are not the reason for that. Problem is at home...

Yeah in the way that there were little to no tariffs on chinease imports.
little no no incentive to produce things domestically.
cheap products subsidized by the government to export, built in sweat shops for insanely low prices, creates an noncompetitive market.
Look at how huawei dominated the market by stealing intellectual property from US companies, and further subsidized by the CCP was pushing out every other brand off the market. Until sanctions were put on huawei. No one can compete in a market like that because of the law, and how chinease companies aren't subject to US laws.

I dont see how saying there should be tariffs on a nation that dominates a market by exploiting slave labor and espionage is propaganda...
Are you saying that other countries should adopt those practices to regain market competitiveness?

[ELS122]

Well I'm for putting whatever the tariffs are on china until other companies from other nations (and domestic) can compete. I wouldn't trade job outsourcing, infrastructure weakening, and reliance on a foreign adversary, just for a 50$ phone...
I dont see how putting tariffs on a dominant market is monopolism. And if you want to say it's just an excuse for more taxes, Then why would they put 100% tariffs on BYD? If it was just to tax goods and not to build infrastructure they wouldnt ban selling BYD cars.

You should read a book or two and educate yourself from sources other than Murica propaganda before writing on geopolitical issues.

Short version? USA companies are greedy and workforce is spoiled in comparison to the rest of the world. So same thing cost 3x times more.  Same thing with EU.

Chinese (or any other nation) are not the reason for that. Problem is at home...

I agree. no country became rich by protectionism. The only result of protectionism is that the people pay higher prices for inferior products.

Countries need to be competitive. That is how countries got rich. By exporting. And countries that tried to stop those imports with tariffs only got poorer, not richer.

Not a country, but every major company exploited protectionism to gain their market share. If for example Sony, Nintendo, etc. didn't use patents to forbid the trade of copied products of theirs, they wouldn't exist.
A country cant be competitive by buying everything. Exporting isnt the same word as importing

[2N3055]

Chinese (or any other nation) are not the reason for that. Problem is at home...

Yeah in the way that there were little to no tariffs on chinease imports.
little no no incentive to produce things domestically.
cheap products subsidized by the government to export, built in sweat shops for insanely low prices, creates an noncompetitive market.
Look at how huawei dominated the market by stealing intellectual property from US companies, and further subsidized by the CCP was pushing out every other brand off the market. Until sanctions were put on huawei. No one can compete in a market like that because of the law, and how chinease companies aren't subject to US laws.

I dont see how saying there should be tariffs on a nation that dominates a market by exploiting slave labor and espionage is propaganda...
Are you saying that other countries should adopt those practices to regain market competitiveness?

I'm not going to dissect all the wrong things you just said.
I'm not going to try to change the way you think.
Your life direction, your beliefs, your moral compass are your own.
Who am I to argue with your worldview.. You do you.. Good luck and all the best.

Have a nice day.

[ELS122]

Chinese (or any other nation) are not the reason for that. Problem is at home...

Yeah in the way that there were little to no tariffs on chinease imports.
little no no incentive to produce things domestically.
cheap products subsidized by the government to export, built in sweat shops for insanely low prices, creates an noncompetitive market.
Look at how huawei dominated the market by stealing intellectual property from US companies, and further subsidized by the CCP was pushing out every other brand off the market. Until sanctions were put on huawei. No one can compete in a market like that because of the law, and how chinease companies aren't subject to US laws.

I dont see how saying there should be tariffs on a nation that dominates a market by exploiting slave labor and espionage is propaganda...
Are you saying that other countries should adopt those practices to regain market competitiveness?

I'm not going to dissect all the wrong things you just said.
I'm not going to try to change the way you think.
Your life direction, your beliefs, your moral compass are your own.
Who am I to argue with your worldview.. You do you.. Good luck and all the best.

Have a nice day.

Only character attacks on this hivemind I mean forum, no discussion or learning. Got it!

[m k]

So society vs individual or market vs company.

Passenger cars are clearly items that are very important.
All kind of protection happenings through the decades.

Investing needs time but BYD is now.

I remember when Nokia went to US, Motorola sued and import was halted.
Argument was that keypad used Motorola patents.
Keypads were bought from Motorola but delay was still there.

Follow the money is still valid.
One longer term example is US trade deficit since Reagan.
One other is poverty, rate is steady.

Tariffs are not needed, just don't buy.

I guess US customers have different world view.
Maybe they can't really see as far as over the border.
When small country politicians are keeping up the importance of export.

[2N3055]

Only character attacks on this hivemind I mean forum, no discussion or learning. Got it!

Like I said, buddy, if you cannot see that what you just said to us is exactly what is wrong with you, I can't help you.
Still, I wish you all the best. I have no ill will against you.

[EEVblog]

Only character attacks on this hivemind I mean forum, no discussion or learning. Got it!

ELS122 please leave this thread.

[EEVblog]

Like I said, buddy, if you cannot see that what you just said to us is exactly what is wrong with you, I can't help you.
Still, I wish you all the best. I have no ill will against you.

2N3055 please leave this thread.

[BillyO]

Just got a notification from DigiKey:

Hello,

On May 1, 2024, Mornsun was placed on a United States sanctions list. DigiKey is committed to complying with all applicable laws and regulations, and has taken appropriate action.

We have suspended all dealings with Mornsun, and immediately blocked all shipments of Mornsun product to customers while continuing to assess the situation. As our customer, we value your partnership and apologize for any inconvenience this has caused.

Please know we will continue to support our customers with thousands of cross references and a broad range of power supply products from leading brands such as RECOM, Murata Power Solutions, MEAN WELL, and more. We encourage you to use our Cross Reference Tool or contact our Customer Support team today to help find other options for your needs:

I thought MEAN WELL was from China too??  Turns out it's from Taiwan.  I guess they are not on the list.

[mikeselectricstuff]

Just got a notification form DigiKey:

Hello,

On May 1, 2024, Mornsun was placed on a United States sanctions list. DigiKey is committed to complying with all applicable laws and regulations, and has taken appropriate action.

We have suspended all dealings with Mornsun, and immediately blocked all shipments of Mornsun product to customers while continuing to assess the situation. As our customer, we value your partnership and apologize for any inconvenience this has caused.

Please know we will continue to support our customers with thousands of cross references and a broad range of power supply products from leading brands such as RECOM, Murata Power Solutions, MEAN WELL, and more. We encourage you to use our Cross Reference Tool or contact our Customer Support team today to help find other options for your needs:

I thought MEAN WELL was from China too??  Turns out it's from Taiwan.  I guess they are not on the list.

Some MW PSUs are made in China

[BillyO]

Some MW PSUs are made in China

And in the USA, so that may have a bearing on it.  I wonder where the parts for the supplies made in the US come from?

[rstofer]

Has everyone forgotten the chip shortages during the COVID pandemic?  We need diversity of location in manufacturing and the end result of manufacturing must be profitable.  Tariffs just nudge decision making for manufacturers.  No single chip manufacturer is going to sink $60B in a domestic factory when they can buy chips from the far east at lower cost.  They need to be nudged a bit.

Just to create a fictional data point, domestic manufacturing of ICs must meet or exceed all military/governmental needs plus some percentage of civilian needs.  If this manufacturer is to be a publicly traded corporation, it must be profitable under all market conditions regardless of how this profit is created.  If they aren't profitable, they certainly won''t get my investment dollars.  There is somewhat more than 7 trillion dollars worth of 401(k) {privately funded retirement} money invested in these companies or $50 trillion dollars of market capitalization in the US alone.  And I expect every stock I hold to increase in value and that only comes from profits or predictable future profits.

Stock price is everything.  It drives the world!  No corporate decision is made without considering the impact on stock price.  That's why corporate executives get stock options.  If they help the company do well, they get some kind of bonus.  'Do well' means the stock price increases.

[BillyO]

Well, this was not a corporate decision.  I'm not sure how increasing costs is going to improve profitability.

[BillyO]

So here are some interesting stats:

The US exports $9.61B worth of integrated circuits to China and $5.34B to Chinese Taipei for a total of about $15B in exports to the Chinese.

The US imports only $2.62B worth of integrated circuits from China and $5.39 from Chinese Taipei for a total of about $8B of imports from the Chinese.

If Chinese Taipei is not included, the balance is even worse.  $9.61B vs. $2.62B 

So, in "protecting" the US IC industry by putting a 50% tariff on Chinese ICs, what if China reciprocates?  How does that spell a win for the US?

This move makes no sense whatsoever.

[jmelson]

I have been making LED regulator boards for a customer at PCBway.  We never got a tariff charge on any of them before.  Now, the last order we made got hit with a tariff of somewhere between 20 - 25%.  My customer had quite a shock about this.  We are now looking for a non-China assembly outfit.

Actually, PCBway just made the bare PCB and then assembled it from parts bought from Digi-Key.  We should only be paying tariff on the board and assembly service, not on the semiconductors on the board.  I don't know how you parse all that out, though.
Jon

[themadhippy]

This move makes no sense whatsoever.

It makes perfect sense to your typical YOU  S  AYE  chanting redneck

[bdunham7]

The US exports $9.61B worth of integrated circuits to China and $5.34B to Chinese Taipei for a total of about $15B in exports to the Chinese.

The US imports only $2.62B worth of integrated circuits from China and $5.39 from Chinese Taipei for a total of about $8B of imports from the Chinese.

Is that just raw components?  I too don't see the point of a protective tariff against a country that we're a net exporter to. 

As a practical matter, a 50% tariff on ultra-low cost lower tier semis isn't going to move the needle as the overall cost with the tariff is still too low for some US company to invest in additional low-grade fab capacity to produce them.  And if they are only applying the tariff to raw components,  then that's just one more reason to use JLPCB instead of an onshore company.

[rstofer]

Well, this was not a corporate decision.  I'm not sure how increasing costs is going to improve profitability.

It won't necessarily hurt profitability but it will increase retail prices and, perhaps, reduce demand.  Will it really matter if an iPhone costs $50 more?   $100 more?  Yes, people will hold onto their existing cell phone a little longer and, perhaps, delay buying their 6 year old the latest and greatest smart phone but maybe those 'nudges' in demand are acceptable.  There are arguments to be made that smart phones for kids is a really bad idea.  Just another 'nudge'.

Yes, tariffs lead to trade wars but, over time, it all works out.  If it doesn't then other measures can be applied.

I just ran into this site: https://tradingeconomics.com/united-states/full-year-gdp-growth

What we shouldn't do is demonize corporations for trying to increase profits by any means necessary.  In the end, it's about money and nobody in the US wants their lifestyle to 'regress to the mean'.

It has a LOT of econ charts and graphs along with explanations.

Interesting paper on China trade relations with US and what it cost in US jobs since 2001 (about 2 milliion):
https://www.rickscott.senate.gov/2023/1/sens-rick-scott-tom-cotton-colleagues-introduce-bill-to-end-china-s-permanent-normal-trade-status

There really is no way to separate politics and economics...

[BillyO]

Is that just raw components?

The report was from the OEC.  They specifically used the language "integrated circuits" rather than assembled or sub-assembled circuits consisting of integrated circuits.

Their definition is:

Integrated Circuits are a part of Electrical machinery and electronics. They include Monolithic integrated circuits, digital, Monolithic integrated circuits, except digital, Parts of electronic integrated circuits etc, Hybrid integrated circuits, and Electronic integrated circuits/microassemblies, nes.