US 50% China Semiconductor Tariff

[S. Petrukhin]

Milwaukee tools are made in China   

A disaster! What is produced in the USA then? 

But this tells us that top-level quality is possible in China, only organization and knowledge are needed.

It seems that the packaging on my instrument contained Made in the USA...

[BillyO]

A disaster! What is produced in the USA then? 

Like most western countries IP and a few boutique products.

[S. Petrukhin]

If you don't think this is a risk to business, try investing in Russia at the moment and see how that works out.

Perhaps you don't know - Russia still supplies a lot of important goods to the US and EU and buys, by the way, too. 
American and Europian companies are present in Russia and make profit.
The companies, that left, sold (did not lose) their property.

Behaving rudely, stealing, and violating obligations with political decisions are not methods that we like. 
Reputation is still important to us. Other partners appreciate this.

You can freely come to Russia and make business here, you will only have problems sending money to home, I think, who created this obstacle you know.

Investments are continuing, there are those who want.

[S. Petrukhin]

A disaster! What is produced in the USA then? 

Like most western countries IP and a few boutique products.

How can we find jobs for 300 million people? Do they bake big macs for each other and that's it? 

[JeremyC]

Is it slave labor if the staff are being paid  more than the countrys minimum wage

You should check these links:
https://www.state.gov/forced-labor-in-chinas-xinjiang-region/
https://nlpc.org/current-projects/report-more-suppliers-for-apple-discovered-using-slave-labor/
https://www.democracynow.org/2020/1/9/inside_chinas_push_to_turn_muslim

[bdunham7]

Milwaukee tools are made in China   

I don't think he's referring to Milwaukee power tools.

https://milwaukeeinstruments.com/

[BillyO]

How can we find jobs for 300 million people? Do they bake big macs for each other and that's it? 

There is a lot of that, but the good jobs are in developing and selling technology to the high-end service industries like health care, banking, infrastructure, transportation and recreation.

[S. Petrukhin]

Milwaukee tools are made in China   

I don't think he's referring to Milwaukee power tools.
https://milwaukeeinstruments.com/

That's right, I meant a hand tool - pliers, screwdrivers, etc.

[S. Petrukhin]

How can we find jobs for 300 million people? Do they bake big macs for each other and that's it? 

There is a lot of that, but the good jobs are in developing and selling technology to the high-end service industries like health care, banking, infrastructure, transportation and recreation.

Probably, military production is still huge and does not use the services of China? 

[BillyO]

Probably, military production is still huge and does not use the services of China? 

For sure.  Like Russia, the US like their military.

[S. Petrukhin]

You should check these links:

And they also eat the bad guys in China. 

My communication with the Chinese gives me the idea that they are too carried away by the race for a "beautiful life" and voluntarily work a lot.
Most often I heard the fear of easily losing job because there is queue of others outside the door.
But I couldn't talk to ordinary Chinese, my social circle is managers and engineers.

When I was young, I could also work 14-16 hours for extra profit. 

[S. Petrukhin]

For sure.  Like Russia, the US like their military.

It's obvious. But in Russia, military production is state-owned, there are no private individuals who directly make huge profits.
In the USA, these are commercial companies that can go and buy in China (roughly speaking).
I understand that there are localization requirements, but businesses can always find loopholes.

By the way, let me remind you that there is not a single Russian military base near NATO countries.
And the Chinese military bases are also somehow unnoticeable. 

[BillyO]

By the way, let me remind you that there is not a single Russian military base near NATO countries.
And the Chinese military bases are also somehow unnoticeable. 

Of course not.  No one would assume that.

[CaptainBucko]

Tariff's can be a complex area, so understanding the impact can be difficult.
In many situations, tariff's apply to consumption in the country applying the tariff. So for items manufactured with tariffed goods, the manufacturer can claim exemption (or repayment) for goods exported.

Country of Origin also matters - and that can be incredibly difficult area in itself. Country of Origin is technically defined by the location of the last substantial transformation or value adding, but when multiple countries are involved, and with pre-existing IP, it gets really complicated. For example, consider a company called ABC who manufactures a new model of operational amplifier. You need to consider:
   - How much IP came from pre-existing IP (earlier designs) and where it was developed?
   - Where the R&D occurred?
   - Where testing occurs
   and finally, where manufacturing occurs.
So just because the item is manufactured in China, does not mean the Country of Origin is China.

[S. Petrukhin]

So just because the item is manufactured in China, does not mean the Country of Origin is China.

If China refuses to produce, do you charge the tape with technical documentation into installation machine?
Legal subtleties are not amplified high-frequency signal. Isn't it?

[ELS122]

The US is under constant "attack" 24/7/365, maybe not physical attacks with guns/tanks/cannons/missiles and such but more of Cyber, IP, Infrastructure type.

National Security involves much more than protecting one's Physical Borders, but IP Borders, Cyber Borders, Financial Borders and Infrastructure Borders as well.

It's well known that Advanced Technology Companies are prime targets for IP theft, and have been for a some time, even from so called "friends" (Remember the 1982 Hitiachi IBM technology theft case, which Hitachi pleaded guilty).

No Government could ever hope to develop the advanced chips we have at our fingertips today, they are far too complex and difficult for any government, even the prestigious DARPA were passed many decades ago in creating advanced CMOS semiconductor technology and general purpose processor chips. So governments are relying on commercial chips, often lots of them, to implement the various forms of "National Security" and protect all the various "Borders". Same goes for Advanced Technology companies which have their own internal structures to prevent IP leaks and theft, many with government "assistance".

Thanks for the detailed answer! It is very interesting to get an opinion, not from the biased media.

I understand the anxiety about cyber attacks. I am not a country, but my home router was attacked so often that I refused the real IP.

But as for technology. Weren't American companies themselves looking for more favorable conditions in Asia and moving production there, refusing to pay americans a large salary? After all, they acted according to market laws - chose more favorable conditions.

I'm sorry, I have a lot of questions. If you think it's possible, please respond. I really want to understand what's going on.

Why are modern chips so important? Was life bad in America 30 years ago without them?
Why is there a threat of losing their production in Asia? Is there a lot of stealing?
Why didn't you want go to Mexico, for example?
Why does this threaten national security, and not a separate commercial company? Especially the one who does not know how to manage risks and does not know how to play a competent, far-sighted game in the market. He does not know how to protect himself from theft.
Why doesn't this threaten, for example, the open core, which is licensed to be produced by anyone who wants to? One successful USA company did not want to depend on Intel anymore and chose an open core - created own M1 processor.
Why is the protection of their companies in China causing a negative reaction?
Why is it important to be at the top and own the world, and not live quietly, enjoying the successes of others and buying the products of others?

Once again, I'm sorry for the many naive questions.
If you answer, there will be more understanding in the world, which is necessary for all of us.

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

[ELS122]

Also, I'm all for rebuilding some lost industry in the West

You don't want that at all. Just think about how the price of a product is build up. On average, 70% of the price of a mass produced product is earned in the sales process (wholesale and shops). Manufacturing earns like 5% to 10% of the retail price of a product. It is not interesting. The best way to make money is doing the design and sales. Leave manufacturing to low wage countries. Look at Apple for example. It makes no sense to do manufacting in 'the West' because people won't be able to make a living from doing manufacturing jobs. Anyone promising/wishing to bring manufacturing back to the the west is living in a pipe dream. Car manufacturing is the next thing to go away.

Well unchaining the economy from other countries is more reliable.
What would happen to all those companies if china for example declares war, they'd put sanctions on the US, semiconductors wouldn't get to US companies anymore, all those companies would instantly go under. And it would take years to build the infrastructure required to keep producing tech. Which wouldnt be a problem if tariffs were already imposed which incentivized semiconductor fabs to be build in the US.

[S. Petrukhin]

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

I sometimes watch CNN, etc., you worked in vain to retell. 

The most amazing thing is that you don't notice the obvious contradictions.

The Chinese stole, sold to American companies and American companies went bankrupt (apparently, different American companies are meant).
Do you have any questions about those companies that bought cheap from the Chinese and they caused enormous damage to self country?

Did the Chinese steal the machines and equipment too? Were they taken out by barges? At night? Has anyone seen it? 

You're talking about market dominance and that's national security. And why don't you want to be dominated?

The Chinese do not tell us about world domination. They just sell what we need and buy what they need.
They do not impose anything, they do not dictate how we live and what is good.
I'm sorry, but personally you and American politicians are talking about dominance. 
It may be strange, but many don't like it. You have to understand - you don't want to be dominated. 

[S. Petrukhin]

What would happen to all those companies if china for example declares war, they'd put sanctions on the US

Are you not concerned about the fate of other countries for which the US has imposed sanctions?
For example, Cuba neighboring? There are no people, there's only the country and it's not a pity?
Or what?

[ELS122]

Do you have any questions about those companies that bought cheap from the Chinese and they caused enormous damage to self country?

Publicly traded companies have the responsibility to be the most profitable to investors, they are incentivized to ignore any ethical decisions.
And if the nation those companies reside in don't protect it's own markets from foreign deals that undercut anything that can be offered domestically, those companies would obviously take the foreign deals which are cheaper.
So it is the job of the government to protect it's own markets from other nations that undercut them, by imposing tariffs for example.

[S. Petrukhin]

Do you have any questions about those companies that bought cheap from the Chinese and they caused enormous damage to self country?

Publicly traded companies have the responsibility to be the most profitable to investors, they are incentivized to ignore any ethical decisions.
And if the nation those companies reside in don't protect it's own markets from foreign deals that undercut anything that can be offered domestically, those companies would obviously take the foreign deals which are cheaper.
So it is the job of the government to protect it's own markets from other nations that undercut them, by imposing tariffs for example.

This is the first time I've seen such logic...    It's mind-blowing!

Well, unscrupulous companies sold their country for money - the law did not prohibit it.
Then the question to the authorities is: why was no law to protect the country?

And most importantly, if your country is easy to sell and money is the main thing, why are you worried about such a country?
Buy another country... 

[ELS122]

Do you have any questions about those companies that bought cheap from the Chinese and they caused enormous damage to self country?

Publicly traded companies have the responsibility to be the most profitable to investors, they are incentivized to ignore any ethical decisions.
And if the nation those companies reside in don't protect it's own markets from foreign deals that undercut anything that can be offered domestically, those companies would obviously take the foreign deals which are cheaper.
So it is the job of the government to protect it's own markets from other nations that undercut them, by imposing tariffs for example.

This is the first time I've seen such logic...    It's mind-blowing!

Well, unscrupulous companies sold their country for money - the law did not prohibit it.
Then the question to the authorities is: why was no law to protect the country?

And most importantly, if your country is easy to sell and money is the main thing, why are you worried about such a country?
Buy another country... 

That is how every public company works.
A law protecting domestic markets would invoke sanctions or tariffs on imports.
I already explained this to you

[tautech]

Well, unscrupulous companies sold their country for money - the law did not prohibit it.
Then the question to the authorities is: why was no law to protect the country?

This ^^
Because the lawmakers of the time had no public conscience.

The ghost towns in the US are proof of that, now skeletons of their previous selves.
Decades later and we now try to clean up the mess initially created by greedy corporates and inept lawmakers.

[EEVblog]

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

I sometimes watch CNN, etc., you worked in vain to retell. 

The most amazing thing is that you don't notice the obvious contradictions.

The Chinese stole, sold to American companies and American companies went bankrupt (apparently, different American companies are meant).
Do you have any questions about those companies that bought cheap from the Chinese and they caused enormous damage to self country?

Did the Chinese steal the machines and equipment too? Were they taken out by barges? At night? Has anyone seen it? 

You're talking about market dominance and that's national security. And why don't you want to be dominated?

The Chinese do not tell us about world domination. They just sell what we need and buy what they need.
They do not impose anything, they do not dictate how we live and what is good.
I'm sorry, but personally you and American politicians are talking about dominance. 
It may be strange, but many don't like it. You have to understand - you don't want to be dominated. 

S. Petrukhin, I'm going to politely ask you not to post in this thread again.
You are clearly incapable of not turning this political. I can see where this will go.

[S. Petrukhin]

S. Petrukhin, I'm going to politely ask you not to post in this thread again.
You are clearly incapable of not turning this political. I can see where this will go.