Let's talk about Trump semiconductor tariffs and the reshoring fantasy.... - Belle of the Ranch

[TexasTowelie]

Well, howdy there Internet people. It's Belle again. So, today we're going to talk about Trump's semiconductor tariffs and the reshoring fantasy.

If you remember back in August, Trump laid out his plan to bring jobs and semiconductor production back to America by using tariffs. His exact words in the Oval Office were, "We're going to be putting a very large tariff on chips and semiconductors, but the good news for companies like Apple is if you're building in the United States or have committed to build, without question, committed to build in the United States, there will be no charge."

So, in other words, we'll be putting a tariff of approximately 100% on chips and semiconductors. But if you're building in the United States of America, there's no charge. That's super clear, right? It's honestly one of the most clear economic policies Trump has ever outlined. Clear numbers, clear targets, clear goals, 100% tariff or build in the US.

So what happened when this promise intersected with reality? It collapsed faster than Kennedy Center ratings. The administration filed the plan recently. “Appropriate responsive action includes taking tariff action now on semiconductors from China with an initial tariff level of 0%. Increasing in 18 months on June 23rd, 2027 to a rate to be announced no fewer than 30 days prior to that date.”

That's right, 0% tariffs until 2027. and that eventual rate is to be determined later. This is being read by most as just an attempt to put some distance between his promises and the eventual capitulation. There might eventually be some more semiconductor production in the US, but it'll be limited and it'll be mainly automated and jobless.

This will end up working out a lot like Trump's visa restrictions meant to open up tech jobs in the US for Americans. What happened while he was tightening the rules and instituting massive fees? 32,000 jobs were reportedly created in India. The big tech companies added 32,000 jobs to the workforce there this year and they're currently hiring 3 to 5,000. The big tech companies being discussed in the reporting are Meta, Amazon, Apple, Microsoft, Netflix, and Google.

This isn't the 1930s and the age of battleships. People don't have to work where the company is based. Come on. We have doctors conducting surgeries on patients via a robot in another city. Instant communication between various parts of the world means it's generally more cost effective for a company to build a workforce overseas. The big tech companies are building out the workforce there. And it's not just the jobs themselves, but the facilities they work at being present there will boost the local economy. The cleaning services, the landscaping, the office supplies, and so on. It's all over there.

It's worth noting that we don't have a direct statement saying Trump's policies caused these decisions, and odds are we'd never get one. But the workforce based in India grew by 18% year-over-year. It's going to be hard to tie that growth to anything else other than maybe better education. Trump's policies once again have a clear loser, the American economy.

Anyway, it's just a thought. Y'all have a good day.