Tariffs kinda make sense when you have a deficit in a widely available item. Big trade deficit with Bangladesh? Sure you can buy cheap textiles from Thailand or Vietnam or something.
Unfortunately this approach does not work when you lack a viable domestic alternative and you're up against a monopoly.
What will the US do if TSMC does not blink? Not buy TSMC made chips? Obviously that is impossible, so the logical conclusion is that American consumers will end up paying the tariffs.
>so the logical conclusion is that American consumers will end up paying the tariffs.
That’s been the point all along… they are significantly raising taxes on the bottom 90% of Americans and most are too stupid to even understand it. Gotta pay for those tax cuts for the wealthy somehow.
It has nothing to do with stupidity. Stop painting people as idiots because they exist in one of the most information hostile environments in human history.
This isn't some natural state that's unrecoverable. The people you describe have been given a highly addictive media environment tailor made to engender outrage and drive behavior. It shouldn't be a shock when most people cannot resist it. The first step to changing it is not writing them off or insulting them for being had.
> most information hostile environments in human history
Is it though? East Germany comes to mind as well as the rest of the Cold War countries behind the Iron Curtain. China seems to be pretty hostile as well. In the US, it is still much easier to find real information that counters the propaganda than it is in any of those other countries. There's no Great Firewall to bypass. You don't even need to do anything anonymously. Yes, the current administration is doing its damnedest to pull the wool over the eyes of their followers, but it's only effective for them. Nobody else is fooled nor stopping their publishing of the opposition to the propaganda.
What you're describing is an Orwellian dystopia, where a boot forces you to think a certain way. We live in a Huxleyan dystopia where there is so much so much to distract you that you become submissive.
The demographic collapse will likely lead to artificial wombs and llm powered vulcan style teaching pits crossed with diamond age primers. Huxley was more prescient than I thought when teading brave new world. I think the nation that has its primers teach the vat-made labor force rhetoric, logic and critical thinking will have lower gdp, but higher stability.
Yes, this, precisely. Our increasingly dystopian present features a fair amount of Big Brother, but Brave New World's soma is what drives and enables it, along w/ aspects of Gilliam's "Brazil"....
There is also so much that's womderful and amazing and positive. No light w/out darkness, "no mud, no lotus", etc. -- which IMHO it's increasingly important to focus on, deliberately.
> East Germany comes to mind as well as the rest of the Cold War countries behind the Iron Curtain
Psychology around ads and how to manipulate peoples thoughts were not nearly as well understood at the time. Large scale studies based on data collected of peoples behavior on computers has lead to dramatically better ability to manipulate and nudge people to do what you want.
The information environment was more oppressive there, but it was easier for people to have their own thoughts since the marketing was forced and blatant but way less manipulative and devious.
I never said or meant to imply by not specifically saying something that the opposing view was unavailable back then. That's just willfully trying to twist the narrative to a purpose I don't know why it is necessary. But since we're here, we can compare/contrast.
RFE/RL could broadcast whatever it wanted. If you received it and heard the contrary views from what official stance was, you can pretty much just accept it. You couldn't just go and search for more information in a browser/app. Seeing video of things just wasn't happening over the air on your wireless. You couldn't jump onto social platform of choice and see images in real time. Information is so freely flowing today it is a joke to compare the two.
>Typical American response confidently knowing literally nothing of what they speak of
Sadly, this reads from someone with a person grudge that has nothing to do with the conversation. If you honestly think there was more information freely available then as compared to know, you've just disillusioned yourself for whatever reason. Yes, there was resistance back during the Cold War. Fax machines FTW. That still just does not compare to how freely flowing information is today. To call today the "most information hostile environments in human history" is just nonsense. How can you even compare it?
> Honestly, you have no idea what you're talking about.
> The idea that people in authoritarian countries are clueless about what’s really going on is arrogant and frankly ignorant.
You can't comment like this on Hacker News, no matter what you're replying to. The guidelines clearly ask us to avoid swipes and name-calling like this. If you wouldn't mind reviewing https://news.ycombinator.com/newsguidelines.html and taking the intended spirit of the site more to heart, we'd be grateful.
Up until recently with SCOTUS saying age verification is not rights infringing, I would have disagreed. Even with that, what else is blocked by default? It's easy to get hyperbolic in partisan discussions, but seriously, what else is being blocked that counters administration propaganda? Yes, Trump admin is changing data on the websites it controls. That's the right of any sysadmin to control and publish content they want. It would be a real bit of censorship if the admin said no other websites anywhere in its jurisdiction could publish contrary data. You can scream about FB/Twitt...er,X/socialPlatformOfChoice making decisions on its website, but again, I go back to it's their site to manage. You can choose to use it based on those decisions, but again, those are not the only sites offering contrary data.
I mean, maybe this way is worse. I can see how it could be far more obvious that the propaganda is BS when it's being pushed at you from every outlet and every form of media. Makes it more clear that it's controlled.
Yet at the moment where there is still diversity, people can make the mistake of thinking that the propaganda is just a difference of opinion so perhaps trust it more.
To me the propaganda is still blatant and there is only an engineered illusion of diversity, only inasmuch as it keeps people opinionated on the things that don’t matter. There’s also no foundational or universal desire for diversity, so alternative propaganda contexts may induce different focus areas.
While i take your point about playing nice, it has a lot to do with stupidity: specifically ignorance, intellectual laziness, lack of curiosity, bias, anti intellectualism, inability to think abstractly, lack of education, lack of critical thinking, ideology, and a host of other things.
Almost all of which correlate in some way to 'stupidity'.
I posit that your first line is wildly wrong, but your message is broadly valid.
Just because someone has a different point of view than yours does not make them stupid. I know plenty of people that have different views of mine that are much smarter than I am, and engaging with them leads to interesting conversations. I can still think they are "wrong" at the end of these conversations, but I'd never call them stupid. Hell, the lottery is often described as a tax on poor people. Yet the vast majority of lottery players would never call it a tax. The vast majority of people that I've talked to that don't understand tariffs are not incapable of understanding the concept. They've only ever heard their information from one source that does not discuss tariffs in this manner. Once they hear other viewpoints not from a single source, they typically admit they are taxes and do not argue against it. It does not change their mind that they are still a good idea.
> Just because someone has a different point of view than yours does not make them stupid.
True, but I'm not sure what that proves. Some people who have different points of view than I do have come to those points of view via reasonable means, and some of their PoVs might even be more consistent with reality than some of mine.
But some people are actually just stupid. Sometimes it's for understandable reasons, but sometimes it's for reasons that the GP laid out, and that's sad and unfortunate, and makes life difficult for the rest of us. I think there are a lot of people like this, and I'm afraid that public policy is in no small part driven by these people's susceptibility to propaganda, and their inability to think critically.
It’s not “a different point of view” to think that tariffs get paid by the other country. It’s not “a different point of view” to loathe Obamacare and like the ACA. It’s just ignorance. When the information is easily available, it’s willful ignorance. When they won’t obtain the information and they still hold strong opinions and vote accordingly, it’s at best stupidity.
How is it not a different point of view to think that healthcare should be tied to one's employment as opposed to all people should have access to affordable healthcare? We can discuss if Obamacare achieved what it wanted to do as I believe it was not very successful, but it at its core is a different view point. Yes, people believing other countries pay the tariffs are clearly not understanding of how tariffs work. But then you went made some clearly erroneous comment that ruined everything else just to get back to stupidity. Which by your standards means you must be stupid too for continuing to put forth a clearly wrong point.
That’s not what I was saying. Obamacare and the ACA are the same thing. The ACA is the official name and Obamacare is an attempt at a derogatory nickname which became common. Hating one and liking the other is an inherently contradictory position. And yet it’s one a lot of people hold. That’s not a different point of view, that’s not having even the most basic understanding of the thing you have an opinion about.
Right, but it puts rational people who seek to govern in a very uncomfortable position when they're up against an adversary who is happy to seize power at all costs, including weaponizing ignorance, ideology, polarization, conspiracy theories, and a complicit media apparatus, and then engages in blatantly un-democratic tactics like gerrymandering and the filibuster, and all the rest of it.
Basically when all or most of the facts are on your side, how do you balance the need to indulge stupid talking points and perspectives so that you can "reach" people, while also not inadvertently conceding ground in an attempt to meet a person where they are?
IMO it’s an incentive problem - it takes effort to be knowledgeable but the practical benefits are next to nothing. But being in a group of ignorant people is actually probably pretty fun, not to mention the dopamine hit of outrage.
Ideally being informed would be both easier than it is today (less misleading crap, more trustworthy structure to think about what issues are relevant) while also being more rewarded somehow.
I disagree with your blanket assumption that consumers always pay for tariffs. In my experience working for a major garment importer, we kept retail prices the same even after tariffs were added. Why? Because competition from local brands forced us to absorb the cost ourselves. Sure, that's not how every industry works, but saying consumers always pay is an oversimplification. It really depends on the industry, pricing power, and competitive pressure.
Whether tariffs are paid by the consumer is a bit pointless. The incontrovertible fact is that tariffs are paid by someone in the importing country, whether the importing business or their customer or a middleman or some combination. These dingbats are out there thinking that these tariffs will be paid by China or Canada or whatever.
"Tariffs are paid by someone in the supply chain" is the most accurate way to put it because it reflects how things really work in practice. Sure, the importer is the one who physically pays the tariff at the border, but that cost doesn't always stay with them. Depending on the situation, that expense can be shared, passed on, or absorbed by others involved in the trade.
For example, if there's a 35% tariff on a $100 item, the importer technically owes $135. But the exporter might lower their price, maybe selling it for $70 instead to help offset the tariff and keep the business deal going. In that case, the exporter is basically covering part of the cost. On the flip side, the importer might just raise the final price and make the customer pay more...or better yet, assume the cost due to intense local competition.
So even though the importer pays the duty upfront, who actually feels the cost depends on how the parties involved respond. That's why it makes more sense to say someone in the supply chain pays. It's not always the same person every time.
Even if you assume perfect competition costs like tariffs can be passed back to producers.
Imagine a demand and a supply curve.
From the perspective of a producer outside the country the tariff effectively shifts the demand curve, but doesn't affect supply. That's going to lead to a lower price at equilibrium.
Of course, from the perspective of the consumer it's the opposite situation, the supply curve shifts which leads to a higher price at equilibrium.
Both happen simultaneously, who pays most of the tariff depends on the elasticity of the supply and the demand
they were not arguing for or against obamacare, they were pointing out the laziness of people that don't realize that Obamacare _is_ the ACA, but somehow hate the former and love the latter.
> How is it not a different point of view to think that healthcare should be tied to one's employment as opposed to all people should have access to affordable healthcare?
Please explain how members of a low-income household would rationally and knowingly advocate to eliminate the only access to healthcare they can afford.
Then, if you are able to present a coherent argument, try to explain that in a stupidity vs diverse point of view, this stance is indeed not founded on stupidity.
> Just because someone has a different point of view than yours does not make them stupid.
He never suggested that. You defended these voters by saying they gladly accept the propaganda information diet, not that they have well-reasoned differences of opinion.
No, that's not my defense. You're putting words in my mouth. I'm saying that because they voted for someone that you disagree with for whatever reasons does not automatically make them stupid. They could have voted for someone for a totally different reason than tariffs. Now their guy is doing something they don't know anything about and now they are personally getting attacked. Whether they know anything about that topic or not does not make them stupid. If they attempt to argue without being fully versed by quoting what the face on TV tells them, again, that doesn't make them stupid. It just makes them very bad at debating. Look at all of the "man on the street" comedy interviews that are out there. Most of these people have no clue about what they are talking about, but just want to argue against the other side. A lot of the people are definitely not "very smart" but that's because they are cherry picked for that purpose. There are a lot of people that voted for this guy because the last guy was just unable to articulate much of anything and did not put forth a lot of confidence in pretty much anything. Knee jerk reactions usually have some pretty negative consequences. Just looking at current polling suggests there are a lot of people that voted for this administration yet are not happy with what is going on. Yet you are saying they are stupid. If these people were really onboard with "other countries pay the tariffs" there would not be negative polling numbers.
All I'm saying is stop painting with a broad brush in that anyone voting for a party is stupid. I'll defend people voting for who they want or even voting against someone they don't want. To call them stupid is just stupid.
Ugh I did put words in your mouth because I was reading nosignono's comment. Apologies.
Still, arbitrary_name seems consistent about not judging people for ideological differences but rather for choosing not to be accurately informed. I.e. he is not saying "they're dumb because I don't agree with tariffs" he's saying "they're dumb because after Trump promised to make us rich with tariffs, they didn't bother to check how duties are collected." You seem to agree with this to an extent.
> All I'm saying is stop painting with a broad brush in that anyone voting for a party is stupid.
I mean, it's four broad brushes right? The dupes, the single-issue voters, the identity voters, and the ones who believe in whatever his policy happens to be. I don't think it's fair to say they fall into a single bin but they're not all snowflakes who cannot be characterized en masse.
> I'll defend people voting for who they want or even voting against someone they don't want.
Okay but what about the ones who vote for what they don't want. The ones who voted Trump to release the Epstein files. Or to balance the budget. Or to end the Ukraine war day one? They took a look at his first term, listened to his campaign promises, and decided, "surely he will deliver!"
I appreciate you trying to "remember the human" which is one of the top rules of hackernews and every single comment replying to you isn't bothered that they call a whole swath of people stupid.
How can we heal, change, and recover from this without reaching out and understanding their POV.
As Orwell has stated ages ago, there is a group of people who will only accept the truth when it confronts them on the battlefield. The unshakeable belief in previous priors leads many people to only face certain truths when forced to through lived experience.
There is la video circulating of a business owner making fun of the Amazon concept of showing thd amount tariffs add to the final price to the consumer. This guy in this video says that number is going to be 0 on his website because his product and the stuff used to make it is "Made in America". The next video is literally him bitching about how some of the Made in America stuff he needs to make his product increased by a grand in just one month. And he like, "why in the fuck are these Made in America affected? Something's messed up here."
At the end of the day, this is a business owner who was aware that the biggest online retailer in America said tariffs are going to affect the price of products the American consumer buys. If this guy can't be bothered to dig a little deeper to save his business, it's hard to expect other people that are a couple degrees removed from the action to do so as well.
In addition to being rude, its not a particularly clear word.
So I coined "idiodidact", to specifically describe people who have personal selectivity with regard to being teachable. (Greek/English usage: "idios"/personal choice + "didact"/taught)
Any resemblance, to any other word, would be a coincidence.
In a way it kinda does though - like definitely the information ecosystem distorts things, but some people do not have (or do not exercise) the critical reasoning skills to decipher what's true from what's not. Or what issues are actually important from those that are meant to just distract - not everyone can tell the difference and see how the incentives actually point to what's going on.
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The education system failing people is part of the issue. Why would you want people to have critical reasoning skills if you want to control their behavior through outrage.
Looking at the agenda of the party currently in charge, the system isn't failing people. It's performing as intended. When you do not want the masses to be educated, you defund those that are in charge of educating to the point it has no other outcome than to come to a grinding halt. As intended. After all, the numbers stop going up when you stop counting.
I'm often reminded of a conversation my arrogant younger self had with an Englishman I was having a bit of back and forth banter about Yanks vs the sun setting on the English empire. I asked if the Empire was so great, why did all of the colonies end up revolting? His answer was simply, "we taught them how to read." Once the masses can read and think for themselves in an educated manner, they tend to no longer put up with being trodden over for much longer. So the answer is clearly simple to stop educating the masses.
Those people may not be innately stupid in the sense of not being able to learn or understand things. But they have been rendered functionally stupid by the media, propaganda, and politics. I actually find that state quite unrecoverable.
I see things as incentive problems, including this.
People are incentivized to be intellectually lazy since there isn’t really any personal reward for making the effort (your vote is on the margins practically meaningless, even if you’re “right,” whatever that means).
But there is great reward for staying ignorant (dopamine hits from outrage media and camaraderie with the large plurality of similarly intellectually lazy people).
How do we make it so that having well reasoned opinions is actually rewarded commensurately?
> Stop painting people as idiots because they exist in one of the most information hostile environments in human history.
Two things can be true at once. Being force-fed bullshit doesn’t necessarily make somebody an idiot but it also doesn’t necessarily make them not an idiot.
Perhaps, but the problem is that Americans really love their propaganda environment. The anger makes them feel alive. In some ways it's worse than the USSR, where everyone knew the propaganda was dull bullshit and all the interesting artistic work was in trying to subvert that.
> The people you describe have been given a highly addictive media environment tailor made to engender outrage and drive behavior. It shouldn't be a shock when most people cannot resist it.
Although I also take issue with labeling people "stupid," I also take issue with the blanket assumption that people are victims of the media environment. Both take away people's agency in their own way.
Instead, I'll ask this uncomfortable question. What if a good chunk of these people would prefer to believe a convenient lie over an inconvenient truth? If so, what does that say about them and their morals? Is that better or worse than being labeled stupid or a victim?
Absolutely there is a strong component of cognitive dissonance: the truth hurts, lies are soothing.
The truth? They do not care about basic right and wrong. They voted for a rapist, a felon, a vile insurrectionist. There’s no morality and we know this based on how they’ve voted.
But also the unwillingness by their friends and family to call them out promotes non-accountability. For everyone.
And, imo key, is the fact that this goes both ways. I've had conversations with both blue-collar types as well as white-collar types where both groups fail to grasp nuances and economonico-historic context. It's TikTok turtles all the way down. Breaking through echo chambers is harder than ever and there are no incentives to do it.
I’m not in the US, so I don’t know what it’s like from the inside but from the outside it’s so comically obvious how straight up stupid and brazen trump and his cronies are that it beggars beleif.
They're not gullible. They are in full agreement with the leadership's desire to punish the "undesirables" in their society and purge the values they don't agree with. That they too will eventually suffer the consequences eventually is less urgent than knowing that the "others" feel threatened right here and now.
But also, they’re being misled. Most non-Trumpers coddle, forgive in advance, and invite Trumper friends and family to the usual social functions. This is permission. It’s helping everyone normalize the depravity.
In a very real way there’s no conversation happening because one party has removed themselves from rationality and the other party has broadcast they don’t care.
There will need to be enormous amounts of pain to get either party to snap out of it.
This is bullshit. It would be partly valid if it were just about "information hostility" but its not. People are making choices not just due to ignorance or misinformation, but based actively on spite, hatred and "fuck you got mine". People are deciding not to necessarily better their own situation but to harm others. It is selfish, myopic and yes, utterly fucking stupid.
Normalising this way of behaving means that yes, if you're in the group that benefits from today's decision you're ok, but nothing stops you from being in the out-group tomorrow. And if your goal is inflicting harm, well tomorrow that harm will be inflicted upon you.
Sure instead of calling them stupid I’ll just tell them they’re addicted to toxic media and we need to regulate the media for their own good because of their inability to resist it.
At this point they're not "being had." They are deliberately and belligerently ignorant. It's way past time to stop giving anyone a free pass on supporting this malevolent clown.
Why do you think this was the first step? That these folks have not been engaged with: information, compassion, alternative news sources, pleas to think twice about what they read on Facebook? Why do you think these folks haven't listened to Trump himself over the past 10+ years, or lived through previous elections cycles, including Trump's previous term? There's no way you can claim the wool was pulled over people's eyes this time around.
Also, acting self righteous while demanding decorum is rich considering how this admin promised to and followed through on completely dehumanizing huge swathes of people as its base cheers on. Please, display one ounce of good faith.
1/3 of the voting population elected a known criminal, known sex predator, suspected child rapist, and known economically illiterate imbecile. The information may be hostile but it was widely and easily available.
At least 1/3 of the US voting population are idiots. Obviously there is a subset of that voting base that made an intelligent decision knowingly and complicitly elected Trump despite the extremely serious red flags, but I would still consider them to be idiots.
"Stupid" seems like a pretty fair way of describing that. If someone watches media that outrages them, misinforms them then causes them to make stupid decisions then the consequences are very much on their head. It is well know that the people peddling strong outrage are basically scumbags in it for the money and not the sort of people who should be listened too if you want to achieve long term success (which is mostly the domain of trusting optimists).
There are a lot of high quality media sources out there that don't promote outrage.
> It has nothing to do with stupidity. Stop painting people as idiots because they exist in one of the most information hostile environments in human history.
No. Someone refusing to spend 30 seconds understanding how a tariff works is the result of an idiot. My 10 year old figured out how they work in under 5 minutes. There’s literally no excuse for a grown ass adult to refuse to educate themselves on the subject.
“This media environment” doesn’t prevent them from typing “how do tariffs work?” in their search engine of choice and reading the first result.
I just googled "How do tariffs work?" I got hit with several college level vocabulary words describing tariffs in both the AI summary and my first result. It might be less of a problem, if we had adequately funded schools.
The full AI summary from DuckDuckGo for "How do tariffs work?"
>Tariffs are taxes imposed by a government on imported goods, making them more expensive to encourage consumers to buy domestic products instead. The costs of these tariffs are typically passed on to consumers, resulting in higher prices for imported items.
I don't see any "college level vocabulary words" and it directly says that it makes goods more expensive and the costs are passed on to consumers. Maybe Google's complicated answer is part of the "media environment" being criticized.
The LLM systems being what they are, you can ask google "how do tariffs work, using eighth grade words" and you get a very clear and correct explanation without the college level words.
In simple terms, think of a tariff like a special tax a country puts on goods it buys from another country.
Here's how it works:
When a country wants to import something, like cars from Japan or clothes from China, it has to pay an extra fee (the tariff) to its own government before those goods can come into the country.
This extra fee makes the imported goods more expensive than products made in the country itself.
Why do governments do this?
To protect local businesses: By making foreign products pricier, the government hopes people will choose to buy things made in their own country, helping local businesses grow and create jobs.
To make money: Tariffs can also be a way for the government to collect some extra cash.
To get other countries to change their ways: Sometimes, countries use tariffs as a way to pressure other nations to follow certain rules or to stop unfair trade practices.
Example
Imagine a bicycle store in the US wants to import a bicycle from another country that costs $1,000. If the US has an 11% tariff on bicycles, the store would have to pay an extra $110 (11% of $1,000) to the US government, making the total cost to bring the bike in $1,110. This makes bicycles made in the US seem more affordable by comparison.
I can't tell if this is a sarcastic comment. Not only is "domestic" a relatively simple word with a straightforward definition, but also the point of the original comment that "consumers will end up paying the tariffs" is still clear from the summary regardless.
>> What is a tariff? A tariff is essentially a tax imposed by a government on imported goods. When a product crosses a country's border, the importing company pays this fee to the customs authority before the product enters the domestic economy. (start of Google summary)
For crying out loud, information is so accessible. The inability to find and discern at least some level of truth (or at least gather multiple contrasting perspectives) is laziness, AND stupidity.
I'm all for better schools, a better information ecosystem, and more tolerance, but why are we bending over backwards to tell malignantly underinformed people it's not their fault? It is! It is their fault.
I asked Google to "explain tariffs in simple terms" and it sure did. A sixth grader would easily get it. Here's the response (and now I'm wondering whether a GenAI system could create a short animated video or slide deck that could become a TikTok):
Tariffs in simple terms
A tariff is like a special tax that a country places on goods it buys from other countries.
Imagine this
You're buying a toy made in another country.
The government of your country might add a tariff to that toy's price when it enters the country.
This makes the imported toy more expensive than a similar toy made in your own country.
The company importing the toy pays this tax to the government.
However, they might then pass some or all of that cost onto you, the customer, by raising the price of the toy.
AND stupidity is you being intentionally ignorant.
People have much better things to do than look up words, look for dissenting opinions one something the face on their TV tells them. There's taking the kids to _______ practice. There's TV shows to keep up with. There's an infinite feed of content to scroll through. There's plenty of other things that they would prefer to do themselves than whatever it is you would prefer them to do. That does not qualify as stupid. To me, what is stupid, is everyone here calling others that have differing view points than their own stupid. You are willingly using that term in the same way you say they are willfully not looking things up.
If you’re too busy to find out what tariffs are, fine. I get it. But then don’t have an opinion on the matter. Don’t vote for an absolute shithead because you think these things, which you’re too busy to find out about, will be great for the country.
Having an opinion is a constitutional right. You can't tell people not to have an opinion. That is stupid. People vote for many reasons while a lot of those vote on a single issue. If the person receiving their single issue vote means there's baggage to get their one hot button item then so be it. I voted for someone not for what they represented so much as it was a vote not for the other person. The person receiving my vote definitely didn't make me all smiley and thinking panacea was on the way. In fact, my last 3 votes were this way.
To paraphrase Randall Munroe, “it’s not literally illegal to do this” is the weakest possible defense of something.
I sure as hell can tell people not to have an opinion. That is my constitutional right. If someone has strong beliefs about something and votes accordingly, and they don’t put in the effort needed to find out the basic facts about the matter, then they are stupid and that’s bad.
Man, I really feel like people are deliberately obtuse in this thread. You can have a single issue while that issue is not tariffs, yet everyone is harping on you about why you voted for someone so in favor of tariffs. That's not why you voted for him. Just look at the polling. MAGA world is not a fan. That's the die hard base. Some of these people's single issue was Epstein and now they're really pissed. They know everything about their one single issue. You're the one that can't keep it straight
Talk about deliberately obtuse! We’re not criticizing these people for voting for someone in favor of tariffs for other reasons. We’re criticizing them for voting for that person because they’re in favor of tariffs despite not knowing what tariffs actually are. Your response of “maybe people voted for other reasons” is completely missing the point here.
The original post was painting anyone that voted for the current admin as stupid. The conversation also assumed that anyone that voted for POTUS did so because of tariffs. That's clearly not true. Are there people that voted for POTUS while also having no clue about tariffs, yes and this is not in dispute. What is in dispute is that anyone that voted for the cheeto-in-chief is automatically stupid. It helps to keep up with the thread. This assumption that everyone that voted opposite of how you did is automatically stupid is what is actually stupid.
==giving more money to an underperforming school only makes it worse.==
Is there no circumstance where more funding would help an underperforming school? It certainly “can” make it worse in instances, but there are many reasons that a school might be underperforming. To imply that more resources would fail to help any of those problems is quite a leap.
What if the student-teacher ration is 40-1 and more funds allows for another teacher, might that make the school better?
What if the school is only open for 4 days due to low funding, might an additional day of school make it perform better?
What if a school has multiple disabled students slowing down the curriculum, but no funds to give them personal support, might more funds help it perform better?
It's a good thing we, the enlightened of HN, can see through the bullshit clearly though. /s
With tariffs, it's entirely possible that the loss of blue collar jobs due to offshoring more than offsets the cheap toys those folks get to import in exchange. Especially when the cost of housing, education, and medical care is rising regardless. It's not uncommon to hear labor leaders rail against NAFTA and be pro-tariff[1] for this reason.
It's also possible to be pro-tariff and recognize that Trump's policy is whatever keeps him at the center of attention, downstream consequences be damned.
A concept of a plan, a verbal agreement, even just a phone call is better than a binding trade agreement that lasts 20y. Because the former provides what matters most: distraction from the things that will put Trump in jail and a feeling of power and importance.
No, they are idiots. Not at media consumption, but idiots at life.
There are certain life skills that can be considered “smart” like revisiting your established opinions when presented with new information, or knowing that encountering a new piece of information from a single source doesn’t carry the weight of encountering it in dozens of places, or that making a mistake doesn’t guarantee that your existence is doomed but been presented with a learning experience.
The “stupid” folks refuse to take the simplest steps to better themselves. They refuse to self-evaluate honestly. That’s the root cause. This stupidness results in them being duped and misinformed.
Therefore, when one encounters an uninformed and duped person, it’s not out of line to consider that person “stupid”.
So when people like OP say that people are stupid, it’s not a dig via victim blaming. It’s a judgement that they’re clearly being stupid, that their poor life skills need work because they ended up misinformed.
it feels fair to call tariffs a VAT that goes away if the manufacturer produces things domestically which seems… reasonable? raise revenue and encourage domestic manufacturing.
yeah, it sucks that I can’t buy a JetKVM right now. otoh being dependent on (often) adversarial nations for everything we buy is also not ideal.
Manufacture domestically and whatever the price increases is goes back into the local economy. Somebody is going to be paid for that work. Also, money circulating is what makes an economy strong.
Sure that's potentially one effect- but I'm not sure it's the most important.
The other effect is to reduce international trade and the kind of national interdependency that creates, and so makes, large scale war highly unlikely.
The US is also trying to use it's economic power to force people to choose sides ( cf secondary sanctions on India ).
So while Trump might be anti-forever wars he is busy creating a world where WWIII is much more likely.
With this administration, it's probably just more blackmail, in the form of "it would be a pity if nobody came to the rescue when China eventually puts its Taiwan plans in motion! (Not that playing ball is a guarantee of anything either)".
Every promise of this administration is worthless, so why even bother? Either they protect you, because they don't want the chip tech to fall to China or they don't.
Buying half of Intel isn't going to change anything
People will forever take every bluff and proposition at face value though so it gets exhausting following online discourse, where everyone is trying to rationalize it at face value or spinning it into some grander conspiratorial geopolitical scheme. Doesn’t seem to matter how many times the outcome is dramatically different than the starting point with Trump, people want to believe and that’s what Trump hopes they do to get what he wants (basically some marginal gains through intimidation but largely what one could achieve through more traditional civil approaches when negotiating from a power position).
Exactly. I've made the case before that while it may be a temporarily winning approach in business (aside from becoming persona non grata with most banks' risk departments), it's a losing strategy in international geopolitics.
Because counterparty countries will still exist, you'll need to make future deals, and they'll remember the last time you fucked them over.
> it would be a pity if nobody came to the rescue when China eventually puts its Taiwan plans in motion!
Wouldn't that just mean that Taiwan has to choose between two villains, and China can take the advantage of this by changing its narrative and taking the position as a hero, protecting Taiwan from the US.
Taiwan really, really does not want to be part of China.
Or rather, they see themselves as the legitimate government of China, which is undergoing a temporary Communist junta. The separation was extremely violent. I mean, you saw the Three Body Problem.
The US fosters this, to retain a toehold there. Taiwan doesn't exactly love us for it, but they know which side their bread is buttered on.
> they see themselves as the legitimate government of China
No, they don't. But formally renouncing that position[1] makes them officially secessionist in the eyes of Chinese conservatives, adding pressure to invade. The One China fiction matters, though how much it matters is definitely up for debate. But it's a local minima, and rolling the dice comes with significant risk.
[1] At the state level. AFAIU, it's been renounced by several of the major parties in Taiwan, and when in power they've made movements at low levels of government that arguably contravene the policy. But it still remains the official position and its still enshrined in the Taiwanese constitution. And, yes, the US adds pressure to maintain the status quo as it would (might?[2]) be on the hook for the defense of Taiwan. But the majority of the population isn't in favor of formally renouncing it, either; the potential negative consequences are existential, and the material benefit is slim to none.
[2] During Trump's first term it was claimed he privately admitted that if China invaded Taiwan he wouldn't intervene.
This isn't blackmail. A security guarantee has value. Exactly what value is hard to say since the US is the only credible seller of such guarantees in this world order
Like with Ukraine? Like with Iran? The US has proven its word is literally worthless and beholden to the whims of a dictator.
At this point, Taiwan would be foolish to not start working on a secret nuclear bomb program. North Korea has proven its the only way to actually protect yourself.
No need to give them. TW can absolutely make them on their own, in fact they had at least one active project to do that and were forced to stop by the US.
I wouldn’t be even slightly surprised to learn they have a few MIRVs stashed away, pointed at Beijing, just in case.
> Tariffs kinda make sense when you have a deficit in a widely available item. Big trade deficit with Bangladesh? Sure you can buy cheap textiles from Thailand or Vietnam or something.
Sorry, how do they 'make sense'?
What's the problem with a trade deficit with Bangladesh? And in your example, you'd just shift bilateral trade balances around, without impact the overall trade balance of the US?
I could perhaps believe that an overall trade deficit is bad (maybe..), but I've yet to hear why bilateral trade deficits should matter, especially with places like Bangladesh that are not strategic rivals or are even allies like Japan or Taiwan or NATO.
Trade deficits in isolation aren't good or bad but because the US has the world reserve currency it must supply it's currency to the world.
This basically forces it to have a trade deficit with everyone which over time can hollow out manufacturing sectors. Making the whole economy vulnerable to shocks and ultimately causing it to fail.
It's similar to "Dutch disease," where external demand overvalues the currency and harms tradable sectors.
It's not sustainable without careful policy management, and attempts to weaken the currency via tariffs, devaluation, or some other mechanism.
You might not like Trump or his approach but he is directionally correct and does have a powerful bargaining chip (access to the US market - which is basically on track to be the only 1st world consumer driven economy 5 years from now).
Doesn’t this assume tariffs are efficiently adapting to changes in the market? Markets, trade, innovation, even currency prices change all the time. Tariffs change every decade if you’re lucky and when they do there’s a thousand conditional statements baked in that make it even more disconnected from reality
> You might not like Trump or his approach but he is directionally correct and does have a powerful bargaining chip (access to the US market - which is basically on track to be the only 1st world consumer driven economy 5 years from now).
Interestingly, though, Robert Triffin International put out a paper essentially arguing that Trump's tariff approach is all wrong.
On what sort of basis do you make the claim that the US is on track to be the only 1st world consumer driven economy 5 years from now? What do you mean by a 1st world consumer driven economy, as opposed to what exactly?
I do agree that having tariffs on certain items to encourage domestic production definitely does work. The tariffs have to be consistent and on things that can actually be produced in the country.
The issue with Trump's approach is that its not consistent, has nothing to do with which products can be made domestically. Changing tariffs daily/weekly/monthly is not going to encourage domestic production.
> I do agree that having tariffs on certain items to encourage domestic production definitely does work. The tariffs have to be consistent and on things that can actually be produced in the country.
Huh? The US gets to print money for free. They don't even need to have printer's ink any more, since it's all entries in a database these days. And in return they get real stuff from overseas.
And you want to tell me that this is somehow unfair for the US?
The US can print an arbitrary amount of dollars, if there's demand for them in the rest of the world.
Btw, focussing on dollars is actually a bit narrow. When Americans sell stocks or bonds to the rest of the world, that's also part of the trade deficit. So Americans aren't just exporting dollars, they are also exporting stocks and bonds and options and futures. Financial engineering is one of great American manufacturing industries.
Interestingly enough, despite exporting so many financial products (= 'trade deficit'), Americans as a whole still make more money from their foreign investments abroad that foreigners make on their American investments. To simplify a bit too much: foreigners buy low yielding American government debt, while Americans make savvy investments abroad.
> It's not sustainable without careful policy management, and attempts to weaken the currency via tariffs, devaluation, or some other mechanism.
Oh, magical tariffs! They can strengthen or weaken your currency, just as the plot demands. They also prevent hollowing out of industry, and cure toothache.
If you want to weaken your currency, just print more of it. It's much simpler.
> You might not like Trump or his approach but he is directionally correct and does have a powerful bargaining chip (access to the US market - which is basically on track to be the only 1st world consumer driven economy 5 years from now).
What does 'consumer driven economy' even mean? Could you make your prediction more concrete. Perhaps we can even have a little bet.
To the same extent that other forms of taxation make sense. I wish people had this same sudden interest in protecting the free market and maximizing trade when we're taking about income tax or sales tax or property tax, etc.
> I wish people had this same sudden interest in protecting the free market and maximizing trade when we're taking about income tax or sales tax or property tax, etc.
But people do have these interests!
Different taxes distort markets differently. Tariffs are one of the worst ways to tax. Similarly transaction taxes, like a Tobin tax or stamp duty, are bad.
Income tax ain't great, but it's ok. (Details depend on implementation.) Property tax is one of the best taxes, only beaten out by land value taxes. VAT is ok.
And, btw, a tariff designed to raise revenue is very different from a tariff designed to change the balance of payments.
Glad to see someone with economics knowledge! The best taxes are Pigouvian taxes on externalities. They not only raise revenue but distort the market in the right direction. Carbon tax comes to mind (though that's a tricky case as there is no world government, tax works best for local externalities like air pollution).
Well, for Pigouvian taxes to make sense, you first have to argue why in your specific situation Coasion bargaining breaks down.
Similar to how, if you want to use 'market failure' to justify your favourite government intervention, it actually comes with lots and lots of restrictions and only justifies a very narrow slice of possible interventions.
If there's one product we have domestic alternatives to it's semiconductors. We're a couple nodes behind TSMC. Using US only foundries or paying a premium for TSMC is not the end of the world.
More people need to hear this. Similar argument when they tried to stop China from buying certain types of silicon - "Oh well... anyway!".
I am not American, nor am I Chinese. Both of those countries have the capability to make enough compute to do whatever the hell they want. I am, however, European...
Semiconductors are not fungible. Using US alternatives also means dropping all the AI plans and subsidies, at least on US soil. The big AI data centers would all end up in China, owned and managed by subsidiaries and leased back to the parent.
> The big AI data centers would all end up in China, owned and managed by subsidiaries and leased back to the parent.
Well does it matter where industry & technology are located (and who controls them) or doesn't it? The anti-protectionism crowd thinks no, it makes no difference if we make something locally, or import it. A stance not shared by any of the countries currently leading the semiconductor industry - or in the case of China, rapidly catching up.
We couldn't make an iPhone because apple would refuse to cooperate, not because of a technical limitation. We could make a similarly capable phone though.
Apple’s putative refusal to cooperate is surely not the only barrier here. I doubt U.S. consumers would pay a premium for a U.S. iPhone whether Apple thought it wise or not. But when the U.S. president’s branded Made in America phone comes out later this year I guess we’ll see. I’m sure the release is just around the corner.
If the tariffs are high enough there won't be a premium. It also solves the deficit spending problem which needs to happen since no one seems to be able to handle the idea of any spending cuts.
I don't know why analysis like this doesn't go a bit deeper. Yes americans will pay more, but TSMC will also see less demand. Intel has it's own foundry, maybe it can start competing against TSMC, because now TSMC costs a lot more and intel's cost of manufacturing in the US to compete against TSMC can be recouped much better thanks to the new market prices set by the TSMC tariffs?
Government's shouldn't put up with monopolies either, if it wasn't for trump's political baggage, HN would be all over this I'm sure, TSMC is already investing on US factories which even without purchasing a share of intel, it would force them to use those factories and bring them online sooner. We've had multiple unfortunate wars due to dependence on foreign resources that don't have good/sufficient competition state-side, that is not a good pattern to repeat.
If TSMC doesn't blink, maybe they'll get their way for now but all their American projects and in general doing business in the US will be unpleasant and costly until 2028+. Which is cheaper? I don't know, I'm asking because a lot of opinion on the subject isn't talking/explaining about the actual numbers and nuanced economic considerations.
It doesn't work if you don't have 1:1 product, which Intel foundry absolutely doesn't. Not in performance, price or just ease of use. No one is going to risk years and billions to get it working on Intel, that's a sure way to lose your edge.
Companies (like Nvidia) will just raise prices and if demand drops they will divert more of it to countries like China and EU. And demand isn't going to drop much anyway for in-demand stuff like Apple chips or AI stuff. Best case scenario, they (not TSMC) temporarily eat the cost or spread it around.
This has nothing to do with Trump, it simply doesn't result in competitive local manufacturing. Increasingly rent-seeking AND subsidized, with no pressure to compete.
You didn't address the fact that they have state-side facilities slated to open in 2026? You also said intel "doesn't" not "can't" isn't it more reasonable that demand will force supply to adapt. Why couldn't intel compete before? and why can't it going forward? China is working on TSMC rivals (if they haven't succeeded already), the west should just sit on its hands and wait for a military conflict with china because of TSMC dependence? in the short term you're right, but change is long due.
Their US facilities are purposefully NOT bleeding-edge, and also cost more.
And this version of Intel can't, maybe a different one that fully separates design and foundry could. The best solution long-term would be to directly subsidize foundries, with the right incentives to acquire different customers (how TSMC or Samsung operate). They just might get lucky if everyone hits a hard scaling wall.
Whatever happens, tariffs and bans are the absolute worst incentives for innovation and growth.
Monopolists or companies with some degree of Monopoly will absorb some of the tariffs as opposed to passing on. Putting tariffs on monopolists makes some economic sense.
Monopolies with strong demand for their products will happily pass on the costs, and then some. The delicate balance between encouraging demand while maintaining margins.
On the political side of things, they can use their influence and customer base to pressure the government. Silently eating the costs isn't good for them or the market as a whole, long-term.
I think the problem with Intel's foundry is that it cannot produce the same quality and quantity at the level of TSMC.
I was looking through the list of fabrication technology for the latest CPUs, and while they say they are 3nm, it is using TSMCs technology (Arrow Lake S: Fabrication process: Compute Tile (Contains the CPU cores) TSMC's N3B node.)
My guess is that Trump is trying to save Intel by forcing TSMC to buy them under the guise of "I'm forcing companies invest in the US".
> Tariffs kinda make sense when you have a deficit in a widely available item. Big trade deficit with Bangladesh? Sure you can buy cheap textiles from Thailand or Vietnam or something.
If they could no longer sell in the USA than they would no longer have a reason to care about US restrictions on selling chips to other countries. China would be happy to buy many of the chips the US was no longer buying.
We can use older processes if we have to. We'd be taking a step back of... maybe 5-10 years? Computers 10 years ago were not that much slower than they are today. Volume would be a bigger concern than performance. Maybe it'd force the tech industry to start writing more efficient user-facing software instead of depending on the incremental advancements made by chip designers and semi fabs.
> We'd be taking a step back of... maybe 5-10 years? Computers 10 years ago were not that much slower than they are today
There’s more to the world of computing than your laptop.
Stepping back to 10 year old GPUs and server CPUs would be a massive handicap on the country.
> Maybe it'd force the tech industry to start writing more efficient user-facing software instead of depending on the incremental advancements made by chip designers and semi fabs.
It’s not about the speed of your laptop loading Slack. Large scale compute is already squeezing as much performance as we can out of server hardware.
> Is “don’t buy stuff with TSMC chips” really a valid option we have?
Not sure that TSMC would want to do that either! We're probably their biggest market, even allowing for China.
> Isn’t that basically “stop buying high technology” to a large degree?
I think you're right, to an extent, at leastt in the near term.
However, we do have (and especially used to have) various fabbing here in the States, from Samsung to Intel. Especially the latter has been neglected, but these changes would probably accelerate on-shoring and perhaps bring some of it back here.
Don't forget that TSMC is in a country that is probably going to go through some significant instability in the next few years. From a business continuity perspective, we'd need to consider availability and supply chain management with the strong possibility of a major vendor being located in the middle of a hot warzone.
“ What will the US do if TSMC does not blink? Not buy TSMC made chips?”
I think their assumption is that TSMC will certainty give in to any demands. Taiwan needs US support to defend against a much worse (and unfortunately just next door) adversary.. China.
I've been using Intel hardware on Linux for more than 10 years. The instances of driver issues that I can think of are very very few and they were never related to anything Intel did.
I wonder what hardware you've been buying. I've tried Apple, Dell, HP, Lenovo, Intel OEM, Toshiba, ASRock, and a half dozen others. I never saw any of them run Windows (OEM or from Microsoft), Linux, or MacOS X (on the Mac) reliably.
The most recent Intel machine that did work reliably is now 15 years old (and humming along nicely, for what it's worth).
Sure, they had Linux drivers, but they also would do crap like kernel panic, unsuspend in my laptop and overheat, screw up USB, and so on. They did it under all operating systems.
My current desktop is an AMD system on chip. It's great, except it has an Intel WiFi/Bluetooth module. There's been a bug open against all Intel Bluetooth modules for about a decade:
They fail to advertise themselves in a timely fashion at boot, so the intel driver (Linux or Windows) doesn't see them so you have to keep rebooting until it does (or write a bash script that retries modprobe).
Here's the manual for the wildly popular ASUS bluetooth dongle that works around this crap by not using an Intel part. Look at page 1 where they show you how to disable the Windows driver for your existing Bluetooth radio, which apparently can't coexist with a second bluetooth adapter under windows:
The most important pieces, IMO: Asus or Gigabyte motherboards, integrated video (because GPU drivers are usually unstable), Intel Ethernet (avoid realtek), Intel K series unlocked processors - not overclocked, if anything I run them underclocked for cool, quiet and efficient operation. And use quality RAM, that's pretty important. Debian Stable.
Yes it's a tax on consumption and when applied to everything the same way it's essentially a VAT. The admin keeps telling that EU will pay, India will pay but at best they can do is to weaken their currency so the goods become cheeper and it compensates for the tariffs US importers pay.
Arguably, US consumers are super consumers and maybe it will be better for everyone if Americans consume a bit less? I don't think that it should be necessarily bad for business, maybe it's time to switch to world building instead of consuming, maybe as so many people works so hard we as species should gradually move on to use our output for longer and enrich our lives with each new tool instead of consume more and more and keep working the same or more. Eastern Europeans are or used to be a bit likte that, have a slow paced life, have low GDP output, on paper economy and everything is bad but actually have a great life if you have a house with a garden and some stuff you bought 30 years ago and still functioning good enough.
There's no problem with having a trade deficit against one country. There's no need to balance each country, just as there's no need for people to have no imbalance in daily exchanges. It's as if you were going back to a barter economy where there was no money.
more likely than not I think this ends with a vague promise, a loudly declared victory, and a quiet defanging of the promise or just outright ignoring it in the future
Different countries have different considerations.
Most of these "deals" aren't deals and rather frameworks. And given the tumultuous nature of bilateral trade where countries might not follow on their promises. Happens all the time and countries end up arguing at the WTO. So, it is hard to say whether Europe or Japan "blinked". Given the timing of the European deal it might be to help Trump so that he does not have egg on his face for not having 200 deals by 1st August.
India wants to cozy up to US and was one of the first countries to start trade negotiation. Trump-Modi dynamic has been good. The sticking point is agriculture and dairy. Both countries subsidize agriculture and diary. And in both countries farmers form a big chunk of politically aware voters. For the Indian government it is political suicide to even nod along like Japan and Europe. But if you hear Trump he keeps saying it is about Russian oil.
Brazil might have the same issue. Historically, US was the largest soyabeans exporter. But last time Trump got into a trade war with China, the country has moved away from US exports and started buying from China. So, again even the appearance of a deal might be problematic for the government.
And reading this side by side, maybe US farmers are not that economically aware?
India's issues with the US are for completely separate reason.
Bihar elections are coming up in 2 months [2]. Any incumbent government in India can't give trade concessions on agriculture during peak campaigning season in a swing state that can impact elections in 2-3 additional states as well as the general election in 4 years.
The main Indian exports to the US (pharma, electronics, and services) are all tariff exempted so the economic pain is marginal.
The only export that's hurt is textiles, but frankly, textile workers don't matter in Indian elections, especially when most of them leave for 3-4 months each year to work on the family farm and get social benefits based on their agrarian status and voter rolls that they never updated.
Realistically, India and US will sign a deal either after the Bihar elections, or after making ag/dairy a separate track from the rest of the deal.
Trump needs to keep the cheeseheads of Wisconsin happy just like the NDA needs to keep Bihari farmers happy through direct subsidizes [0] and hardline agriculture policies [1], hence why both the US and India will maintain maximalist positions on agriculture and dairy.
My hunch is a comprehensive deal will be announced during the election media blackout in the run-up of the Bihar elections or shortly after the election.
> ... American consumers will end up paying the tariffs
This has always been the case. I have never heard of a company absorbing tariffs on behalf of consumers in the day and age of "trickle down economics".
I'm actually surprised that some prices are even lower now than they've previously been.
I don't think most people actually have a solid understanding of what is and is not affected by which tariffs.
If I understand correctly, most of the tech stuff is effectively exempt; and Canada/Mexico tariffs don't apply to most items that are covered under "the rules of origin" certifications under USMCA (the successor to NAFTA).
I think the biggest hit has been the elimination of the de minimis rule, which now makes it difficult and/or impossible to get anything directly from China by USPS, be that cheap clothing or small electronics.
I don't think companies know what is affected and when... except when the invoice comes. The tariffs have been a moving target, some announced and never occurred.
Eating the tariffs to avoid punishment from the government is just price controls with the dash of lawlessness. Something will give and it will be either profits or prices.
A lot of them are "eating" them in the margins of the unreasonable "inflation" increases they used to see how much the public was willing to pay for their products. (Normally, this would be okay in a functioning capitalist market except we've let way to many companies gain a monopolistic position with no real market competition to force a reasonable middle ground between profit and elastic demand.)
These tariffs are presented as trying to bolster domestic industry but that's a smokescreen. The primary goal is to use this to replace income taxes so the rich are freed from their onerous (/s) taxation.
The bonus is that it's a tool for punishing perceived enemies and inciting interested parties to purchase favor from the regime to try and ease them back.
It occurred to me that tariffs are really a backdoor way of introducing consumption tax (aka sales tax, VAT, etc). It has been a conservative policy goal for many years, as the conservatives believe that income tax penalizes entrepreneurship, but the politics make it virtually impossible to switch to because consumption tax is regressive, and it is a huge change. The tariffs debate and the general political atmosphere created a misdirection, resulting in both income and consumption tax being with us now.
The next development will be the politicians discovering to their horror the high levels of taxation, and abolishing the income tax. Brilliant!
The baseline of no trade deficit between all countries and the US makes no sense, since countries are not uniform in resource or production. eg Lesotho/Bangladesh won't achieve a trade balance with the US when they produce what the US wants and don't consume enough to balance it out. https://www.youtube.com/watch?v=Ah9SrbCB7-k&t=1147s
Let's say this was the starting point. Almost immediately, this strategy of trade balance was dispensed with, leaving most countries with some random tariff rate that wasn't strategically decided.
Many recognizable countries, specifically the ones that the administration targeted for political reasons, ended up with adjusted tariffs based on politic. This was due to the administration figuring out they had overstepped or thought that they were too soft, when the influence wasn't effective. When it became clear the economics were being ignored, Trump called them some epithet that meant "unreasonable" and abandoned the tariff tactic in all but rhetoric.
What was the point? The most predictable sequence of IMMEDIATE events were likely the point. I believe the point was to try to convert the global crises (political, economic, and social) that existed around the world to purely economic concerns for simplicity. This was paired with jamming up the entire global trade system, which would allow the administration to listen for the squeakiest wheels. It was supposed to be an efficient way to prioritize immediate problems such that the administration would not have to learn about and weigh all the problems in the world.
Short and long term, the tariffs have accelerated the de-dollarization of the world economy, they has amplified income inequality, and have destroyed supply chains across multiple sectors. The replacements are necessarily less efficient (value is cannibalized by tariffs). It was a lazy and poorly considerer tactic, but it might have achieved the goal, given my assumption of purpose.
The issues that were raised to the administration were largely, left unsolved. The most prominent of which are the Ukrainian, Taiwanese, and Palestinian fronts and the weakening of the US hegemony due to trade conflicts. The good trade relations with traditionally friendly nations have been damaged, long term. Canada, India, China, most of the EU have made moves to distance themselves from the US chaos. Some strange side effects, like this weird buy in to american companies is a side effect of the show, rather than a specific intent. I can concede it wasn't all bad. The US did see some new corporate inroads into a few countries. Notably concessions from Mexico, who was willing to meet the US goals in achieving a trade balance (more or less).
Overall, it's possible the tariffs succeeded as a self-serving tool of the administration, but failed in serving the US as policy. Maybe I'm just wrong, but maybe Trump is just this simple minded and his administration is playing into the fallout, as it advances their 2025 goals (or whatever).
Why would this post be flagged? It could of course just be automatic due to disingenuous flagging by users, but any administrator could see there is no reason to flag this and then unflag it afterwards.
It actually wouldn't. The sale price will be pretty close to the current market price, maybe %10 more. If the Government kicks in funds to underwrite the deal (say a loan to TSMC) then the deal would likely happen exactly at market price.
That means investors who sell are getting the current low market price or a little bit higher--- they will still be down the massive amount.
This is really bailing out current management-- letting them be replaced by the more capable TSMC people and getting an attaboy for helping the US government strengthen the alliance with Taiwan, keeping peace in the region.
> This is really bailing out current management-- letting them be replaced by the more capable TSMC people
The trouble with a competent organization buying a decadent organization is that leadership at the decadent organization is often much better at winning political infighting (they have a lot of practice).
So it’s very easy to end up in a situation where the disfunction metastases up into the parent.
At the very least, executive attention is finite and splitting attention like this is distracting to the parent executives, which harms the parent organization.
But the buyer can just unconditionally lay off all the top brass, exactly for that reason. The layoff can be more of a golden parachute kind, to prevent any sabotage.
The fab part is not a good deal since Intel struggles a lot with it and they are not even on par with what TSMC was producing a few years back using older processes.
I would guess in this deal, TSMC would produce the chips and fire all the Intel foundry people.
Would they buy existing shares from investors? Would they really find enough investors willing to sell shares at market price? I doubt it. There would be a lot of investors that would rather hold than sell at market price. Market price is the current minimum price an investor is willing to accept. Not the price that all investors are willing to accept.
Would they buy new shares issued by Intel? That seems more likely to me. That would be a bailout to Intel.
This is like an old fashioned Civilization game trade. Taiwan gets a significant ownership in a blue chip US company, TSMC should then take %51 control over intel, and turn it around. The US gets a stronger position with China such that china attacking Taiwan would be like bombing Apple or Google. The USA will go to war over that.
Only the willingness to go to war, stops aggressors. War is terrible and economic competition is the path to peace, but if you can't defend yourself you will get destroyed.
Only the willingness to go to war, stops aggressors.
I'm pretty sure that's why China is saber-rattling so openly. I don't endorse the CCP's arguments for Taiwan being part of China (which rest on a very flimsy historical foundation and are mostly tied to the ROC government fleeing there), but I fully understand their dislike of being militarily encircled by the US. Other Asian nations appreciate the status quo under a Pax Americana, but have made it clear that they are less than enthusiastic about participation alongside the US in any military conflict centered on Taiwan.
The US has been defending Taiwan since before integrated circuits were invented. Supporting an ally and a democracy in a critical location is the only reason that matters.
That doesn’t matter much to this administration, but it’s not like they’re going to care about TSMC either.
You are so naive to think that US actually cares about democracy. Do you ever wonder why they invaded Iraq two times, but never really bothered to invade Cuba, which is in their backyard? Because Cuba has nothing of value, no natural resources, no valuable technologies. So the US tolerates communist regime in Cuba, because there's no money in invading it.
I will disregard "Bay of Pigs Invasion", since that wasn't really US military operation, but some small scale, CIA orchestrated coup.
It seems like they're asking the wrong company to take a stake in Intel. It would make more sense to try to get companies like Apple & Nvidia to take stakes in Nvidia - US based companies that need the product that Intel can supply.
It’s a security deal. They are asking the Taiwan government to trade cutting edge semiconductor manufacturing for defense against invasion. You might call it a racket in other contexts. TSMC is already considered national security infrastructure under Taiwanese law.
Honestly AMD makes the most sense, given they sold off the foundry stuff years ago, which is the part of the process Intel will be doing next.
The board brought on a chop shop guy, you don't do that when there is a future, and TSMC would be smart to wait Intel out and pick it up cheap. The USA wouldn't last a month without TSMC chips, Tim Apple wouldn't let that happen. There is no way this demand has any teeth
I don't get it. Isn't it like forcing the foreign competitor into buying your only chicken that produces golden eggs. I really don't understand the logic behind this.
Just spitballing - maybe if TSMC had a 49% stake in Intel they'd be incentivised to transfer their chip-making technologies and techniques to Intel, to maximise the value of their (forced) investment?
Fortunately for TSMC, Intel really isn’t worth that much anymore. $50B doesn’t seem so bad, and maybe it could lead to a deep partnership and sharing of tech and factories.
Suppose this works: TSMC buys 49% of Intel and Intel remains competitive. Does the US really win? The US’s major fab owner ends up with close to or actual majority foreign ownership, actual competition in the market would be reduced, and there would probably be even more pressure for Intel to move operations out of the US or to consolidate such that it licensed TSMC IP instead of developing its own.
I'm not sure anyone but Intel is against that. Both US parties are most likely furious that the CHIPS act was a massive waste of money. TSMC would love to outright buy a massive US presence with valuable IP. The US desperately needs Intel to turn things around to remain a strategic advantage. Only Intel in their cesspool of hubris would want to keep the status quo of mediocrity.
But TSMC, please please please, get Intel out of Oregon. I'm so tired of that loser state holding back companies from reaching their true potential.
I'm kinda of shocked that chip & many tech companies play ball..
They are a required / no alternatives industry by so much of the USA, with limited alternatives. Is it really more cost-effective for each of these companies to spend hundreds of billions of dollars to avoid tariffs when they could easily pass on these costs because we have no alternatives?
The only telecom in America to resist turning on a domestic eavesdropping firehose tap for the government, was pounded to the edge of bankruptcy.
Intel and TSMC are both strategically important and favored-status corporations for the going concern of the United States, and large swaths of the federal appartatus are invested in their success, contracts, global projection, etc. That comes with a price. Naive to think they are independently operated companies.
> The only telecom in America to resist turning on a domestic eavesdropping firehose tap for the government, was pounded to the edge of bankruptcy.
How so? There was no mention of the government taking action against the company to cause the company to fail. If a company is failing without government contracts, that is on them and not the government.
Bernie was released a month before dying. Don't ask me how I had this fact in the back of my head (I looked at Worldcom and Enron a few weeks ago for another HN story).
I think you are confusing Bernie Ebbers (Worldcom founder/CEO in Clinton Mississippi) with Bernie Madoff (big ponzy scam in NYC)? Yes, they are both named Bernie.
I think people in power are pretty fond of non democratic systems, they like them. They make friends and get favors. Far easier than competing.
And what's the alternative for many of them? Lawsuits?
SCOTUS has quit doing their job. The checks and balances are out the window. There is no leadership / anyone in power at the national level when it comes to democracy in the US at this time.
> when they could easily pass on these costs because we have no alternatives
The administration has made it clear they will take such actions personally.
The USA by and large figuratively controls the world. All of Europe is one step away from a protectorate and if Taiwan doesn't want to conquered by China they need the USA in the way.
If the USA ever sours on the relationship it means China will take Taiwan so they do whatever they need to do to appease the USA.
Intel isn't dead. They've made some bad choices and investments but they're still huge. They have $30 billion in gross profit per year on an utterly boring, non-hype based business model. Get rid of some dead weight, write off the bad investments, improve their foundry business and their value easily grows multiples of what it currently is.
On top of it already being a shrewd business deal, doing a favour for the US government also potentially buys protection for TSMC and Taiwan from China. Plus the immediate tariff relief.
Intel is not profitable. They have negative eps and negative free cash flow. The cash flows from existing products can't be considered in isolation. If their R+D and Capex investments stopped, the sum total of the existing+legacy cash flows wouldn't nearly cover Intel's substantial liabilities.
They also have 50 billion dollars in debt, and their cash flow situation has gotten so desperate that slices of future fab revenue have been pawned off to private equity, who now has a senior claim on the assets (as do the bondholders).
An equity stake and Intel is not something that a TSMC would want without coercion. It's just not a very attractive place to be an equity holder.
>Get rid of some dead weight, write off the bad investments, improve their foundry business and their value easily grows multiples of what it currently is.
As if it was that easy. The company has now been through multiple CEOs attempting to mix up these ideas in various ways. The last CEO tried to do a Hail Mary to improve the foundry business, but the balance sheet can't support it. Now the new CEO is essentially writing off those investments and putting them on the back burner. Considering that, getting rid of the dead weight will be difficult, considering the company itself is largely dead weight... The quality of their employees is not good, or at least not nearly at the level that needs to be (18A yields are alarmingly low, and that's the critical product that basically determines the company's future. 14a is already looking more and more distant despite it being the purported savior not even a year ago).
Realistically, their financial situation puts them right at the precipice of needing to shed the fabs, and/or permanently continue down the path of more Brookstone-like partnerships where they can spread the burden (which then caps the equity holder upside).
There is nothing "easy" about the current situation. Maybe without the 50 billion in debt, but nearly all of remedial paths are running into nasty balance sheet constraints. There's no more room to spend quarters rejiggering the thing.
Current assets are $43 billion. Total assets are $192 billion. $30 billion yearly in gross profit. Debt is only $50 billion. They still hold 75% market share. Repeat, they still sell 3 times more chips than AMD.
Yes, their balance sheet isn't as good as some fabless competitors but if TSMC helps them with their 14a yield then it looks like a good investment.
Also, having TSMC on board will surely help with their fab business. Again, between the US government needing them to survive, TSMC on board, plus the fact they still do have a decent core business, I think Intel (and TSMC's investment) will be fine.
It's actually better than that. TSMC wouldn't help intel with their 14a node. They would kill it, fire all of Intel's foundry R&D, and just build TSMCs 14a node.
You euphemistically called it "help", but all you agreed to was a hostile takeover of a competitor only to gut said competitor. If a company genuinely thinks they are ahead, they don't have to do these petty tricks unless they want to nib a promising competitor in the bud while they are small and cheap. Intel is neither, nor is it a promising purchase. The only thing of value they possess is x86 IP.
But the US government has proven to be unreliable in maintaining commitments -- even words on paper are meaningless as it doesn't seem to stop them from changing the deal later and demanding more ("I have change the terms of our agreement, pray I do not alter them further"), and then another request demanding more. Would TSMC be doing the government a favor and gaining protection, or are they being extorted? ("would sure be a shame if we doubled your tariffs again...")
Does it really matter? Does TSMC have a choice either way?
They’re a globally important company but they’re not ASML and they’re stuck between two superpowers and the threat of potential total war. They’ve had the misfortune of being sucked into geopolitical maelstrom and those tides are far too strong for any company to resist.
EUV was developed with in a Cooperative Research and Development Agreement between the US Department of Energy, Intel, ASML, and so on - giving Congress control over who ASML sells the EUV technology to.
So yes, US companies do have a choice. They can lobby Congress to cut off TSMC from their main hardware and parts supplier entirely, crippling it altogether, except for their Arizona plant which is ripe for nationalization for natsec.
TSMC certainly brings a lot to the table but if they were completely knocked out, it would just deprive the world of the top end of fab capacity for a while. On the other hand almost every fab in the world depends on ASML for parts and maintenance, even the old fabs on legacy nodes.
Taiwan is too dependent on the USA ATM to make that choice. If they were to go it without the USA, the only choice would be to become an actual bonafide province of China, they aren't going to exist on their own. Almost everyone else outside of eastern Asia, however, can make a different choice.
I think there's reason for the EU to ensure that there's no semiconductor manufacturing monopoly.
So the EU offering something like nuclear weapons sharing à la that which Germany etc. would probably be reasonable if the US bullied Taiwan too hard. But I don't think it's happening, I think people want good relations with China.
If it were a win-win relative to their other options, they wouldn't have to be forced into it. They may have been able to make the best of it, but let's not pretend value is being created.
> Will Apple, AMD, and nVidia continue to trust TSMC if it owns half of Intel?
It doesn't matter because none of them have much choice. None of them own fabs and Samsung's capacity is significantly less than TSMC's. Plus Samsung also designs chips.
Not sure about that. Buying Intel would make TSMC a direct competitor to most of its biggest customers which could incentivize said customers to look for alternative foundry.
I understand the push to build fabs in the US to avoid tariffs, as the US likely sees this as a strategic hedge for the global chip supply in case China disrupts Taiwan or Japan, or some other rare catastrophic event occurs.
Whether it is correct or not, Trump seems to view the US as a larger version of Mar-a-Lago, so he'll always feel he can charge a premium for access to its consumer base and market while offering discounts to those he sees as ingratiating themselves.
But it is supposed to be a free market that should reward efficiency and competence, not prop up companies that don't have their act together. If the goal is domestic chip production, funneling funds to TSMC's proven fab operations and to build more US fabs makes more sense than bailing out Intel, regardless of whether it is improper to demand such concessions at all.
>New engineering grads with a master’s degree earn on average $65,700 a year, while general full-time staff earn $32,800—compared to Taiwan’s average annual income of $21,700.
$32.8k for full time salaries in Taiwan, which is more than the average. And this is _general_ staff. Not engineering staff my dude.
>Another challenge is compensation. TSMC pays up to $160,000 annually “for Ph.D.s with some good experience,” says an Arizona-based CEO of a semiconductor recruitment firm hiring for TSMC. That same Ph.D. can earn some $30,000 more at Intel, according to Payscale, a website that tracks company salaries.
And that's the real number for PhDs in the US.
Quite frankly, though, they probably have less competition with Intel now that it's collasping ;)
>TSMC’s American rivals, meanwhile, are defending against its recruiting onslaught. The recruitment firm CEO says candidates have gotten “counter-offers like we’ve never seen. Intel is… giving [people] $10,000 to $20,000 to stick around. We’ve lost people that way.”
AND, if TSMC was really paying so low, their competition wouldn't be falling over themselves to pay retention bonuses.
(I also think they are probably underpaid in their current jobs and don't know it)
My friends working in fabrication - experienced, competent engineers with years of work history in Intel and Micron factories - got laughably insultingly low offers from TSMC. Like, 50k, no PTO, weak or no benefits. They literally laughed the offers away and got cushy software jobs with minimal retraining.
This was a few years back, maybe TSMC realized you can't pay Taiwan rates in the US.
I've learned not to trust articles' accuracy on aspects not corporations that are difficult to verify in public data.
Once I was reading an article saying the company I worked for didn't operate its own datacenters... while I was setting up new hardware in one of our several datacenters.
Seems kind of fascistic and lacking in the free trade department to force a purchase to receive selective exceptions. This is picking winners and losers by extortion.
For drugs that are monopolies, tariffs actually don't impact the end price and hit the producer. In the short term, for drugs that are already on the market. In the long run, it reduces incentives to develop drugs.
Tariffs are a tax on consumers for commodities but not for monopoly products.
So the assumption is they take the hit of 250% and just keep providing the US with these unique drugs when the US is "only" at max 20% of the total market? Afaik even less the more specialized drugs get.
Edit:// it's not just me. Swiss media does barely seem to understand anything anymore either
A monopolists can set prices however they want (in contrast to competitive supplier of commodities where there's a market price). They want to maximize profits and if marginal cost of sale is negligible (as is the case for patented drugs) the optimal price is determined by the demand curve. The demand curve depends on the price the buyer sees including tariffs. So the price post tariff is the same as the price without tariff. The monopolist absorbs the tariff, customer pays the same.
Yes, monopolist will still want to sell because they still make profit. They don't take a hit of 250%, their profits are just reduced by ~2.5x.
US has famously high drug prices due so cutting edge pharma makes much of its profits there.
This is all standard 101 International Economics, Paul Krugman has written the standard textbook for it, it's a fun read.
Too many reasons for a reply here, but overall the common theme is lack of regulation giving pharma more power to play on their patent-derived monopolies.
As for Switzerland, it's a small country with an economic model that doesn't scale/generalize. Even in Switzerland there's constant discussion about health care (insurance) being too expensive - though the biggest driver is wages not drug prices.
I am not sure if you read other news but I am not aware of constant discussions when our insurance is comparingly cheaper than for example Austria but we earn 3 times as much.
Its nearly a guarantee TSMC was going to be exempt. The dismal performance of their AZ location and Samsung's TX location shows how the US wouldn't even be anywhere near 20% domestic manufacture by 2035. Capital≠Competency. The 70k staffing shortage, difference in culture is the real issue here. This tariff would have turned into a kamikaze maneuver had it not been for the carveouts.
I was stunned when it was announced. I mean having contradicting tariffs and goals is one thing, but semis?! Wonder if this will finally get Intel their first Intl. buyer for their semis.
Unprecedented rapacity by the United States - not only forced tech transfer, and then having to pay for the privilege of being robbed; the hegemon is consuming its vassals, as it withdraws from its commitments.
Look at Intel's history. Concentration of power (monopoly) generally leads to corruption/abuse and stifled innovation. It's bad even for the monopolist.
The second China becomes powerful enough to throw their military around like the US is when I start supporting tech transfers the other way. A more distributed power structure is much better for overall progress.
Go look up "world's happiest countries 2025". There are lots of places that are absolutely thriving despite not having the biggest guns (and perhaps because of it).
That sounds a lot like "Well our enemy doesnt follow the Geneva Conventions, so why should we?"
Ask yourself what the benefit is of having the US as a diplomatic partner if you can get the same deal from China but with a more stable and predictable leadership.
By corporate practices this is not a good thing. Companies buy companies if they are complementary to them (which Intel is not to TSMC) or competitors in order to extinguish them (which nobody wants for Intel). Government enforcement to buying a company leads to mutual hurting. So no option is left than to do nothing.
The article pretty much says it right in the opening section
> investing a further $400 billion in the US alongside buying a stake in Intel seems improbable from a purely financial standpoint
TSMC's entire assets are ~$200,000,000,000 [1] (cash, inventory, accounts receivable, land, buildings and equipment.)
Buying 49% of Intel ... maybe. Intel's outstanding Market Cap is current ~$88,600,000,000. (4,377,000,000 outstanding shares [2] @ 20.26 8/5/25 midday price [3]). Double TSMC's entire assets is a bit extreme.
Notably, Intel's valuation also seems kind of nonsense. They made $13B in revenue last quarter. 2024 yearly was $53B ... on a market cap of $88B? Intel's been a mess lately, yet their valuation's also kind of a mess. If they ever stop bleeding money on operating profit and net income they won't look that bad.
They could do the China[1] / EU[2] strategy of announcing they'll do it, but never following through with it. When your opponent has the attention span of a drunken gnat, it's a surprisingly good strategy.
What part of any plan they have had tells you they are likely to stop losing money any time soon? They are basically selling for asset price right now...because the market doesn't believe they are worth more than their assets.
The remaining 51% would be highly fractured unless it was like the US government on the otherside. One of the publicly traded companies I worked at effectively got taken over with <20% of regular shares by an activist billionaire.
That money will be provided via a loan, from the US Government, at a reasonable interest rate. USG doesn't lose money, TSMC gets to expand into all of Intels fabs (when they raise the money to buy a controlling interest in INTC down the line.)
Or the entire thing can be done by a stock swap, with whoever diluting themselves however amount is necessary, etc.
I’m convinced that this is all what it looks like to live through the end of an empire (or whatever term you’d like).
I think our lives are short enough that it can be easy to perceive something like America as “always was, always will be” and the rest is just trivia you learn in history class.
The collapse of an empire is correct. USA is absolutely an empire, and we're clearly seeing unprecedented contractions and spasms of our government as it ineffectually attempts to govern while doing everything it can to foment civil agitation.
> I’m convinced that this is all what it looks like to live through the end of an empire (or whatever term you’d like).
It feels to me like it's more like the beginning of an empire, in the sense of existing under an emperor.
> I think our lives are short enough that it can be easy to perceive something like America as “always was, always will be” and the rest is just trivia you learn in history class.
I think it very interesting that one of the things the USA is going to have to grapple with, in the middle of the most contentious presidency in its history, is the semiquincentennial of independence itself.
The bicentennial of independence in 1976 was I think largely an uncontentious thing even though the Vietnam conflict had ended only a couple of years beforehand and the presidency was in the hands of a guy who had taken over the job from, and pardoned, a crook who was forced to resign. Internationally people were pretty kind and generous to the USA.
I don't think anyone, anywhere on the planet, is prepared diplomatically for how it will play out this time. Next year is going to be a heck of a year.
If you think Obama wasn't overseeing an empire, I don't know what to tell you. Maybe you should ask the people of Pakistan, Yemen, Somalia, Afghanistan, Iraq and Libya about the US drone strikes there.
Oh, that isn't what I mean, and I am willing to accept your view. (And I was joking a bit anyway)
What I mean about the beginning of an empire is, as I said -- the beginning of a true individual, not simply unitary, emperor. That the executive is transforming into l'état, c'est moi, which no US president has had the luxury of ever before, because Congress wouldn't ever have handed over the influence and authority they had.
This could still be turned around, with some luck and effort. But it won't happen if the voters don't get out of frog-being-slowly-boiled mode, clinging to normalcy bias.
So in the end your assessment is probably correct. It's probably going to be a long, slow decline though.
You wouldn’t have said that before Trump took office, so it seems to me that it’s one idiot causing all of the problems and not the kind of slow decline that happens over a long time span when an empire falls. What Trump is, is not compatible with who we are as a country and I’m confident he is going to bring about his own undoing when the economy really starts falling apart.
Actually I would argue that America has been slowly in decline for a long time now. And the inflection point is when there’s critical mass of that rot that someone like Trump can be elected. How embarrassing for all Americans that it got this bad, but even worse: it being this bad will greatly speed up the process.
Just last week, the director of the Bureau of Labor Statistics was fired because the jobs numbers didn't look good and that upset the person in charge.
This isn't corruption or coercion. This is a deal. These are terms being offered. They can say no, or counter. But these terms benefit all parties-- TSMC can eventually buy out intel, get lots of top end fabs, bring their superior processes to those fabs and meet the huge demand in AI chips-- that they currently can't grow fast enough to cover. ASML machines take years to build... a better TSMC process on existing ASML machines in Intel fabs is an easy %30 win for the entire world.
Plus, china kept at bay, peace increased, intel's bad management gets to bail out saving face, TSMC gets rewarded for their hard work, Trump gets a win, Intel's employees get better management, and get rich from their stock options winning hugely....
Capitalism is where everyone wins like this.
Even china, because china loses if it goes to war, but china feels it has to go to war.
I don't see how it can't work at least short term, when the US is by a long margin the world leading military and economic power.
Why else has the US been overspending on military for decades and planting military bases and nuclear submarines all over the world, to become the world hegemony, if not to bully everyone in doing its bidding when push comes to shove?
I'm not defending the actions of the US, I'm just asking what are the other countries gonna do about it? Ally with Cuba, China, Iran and Russia to fight the US? Unlikely.
UK, Canada, Australia, New Zeeland are 5 eyes members and therefore lapdogs of the US, and the EU as much as they dislike the US due to Trump, has a laundry list of urgent domestic issues like Russia, no cheap energy, no high growth industry like tech, ageing population, economic stagnation or even decline, collapsing welfare and pension system, illegal immigration leading to a rise right wing extremism leading to crackdowns on freedom of speech and censorship leading to further social and political turmoil. So how is the EU gonna retaliate when they can't even keep themselves together?
What can they do now, when the US holds all the cards? Their only hope can be that the US collapses from internal issues, just like the Roman empire, but until then, they literally have no screws to turn on the US and just like the EU, Switzerland, etc, are forced to accept the terms of the US or have their already fragile economies suffer even more.
> I don't see how it can't work at least short term, when the US is by a long margin the world military and economic power.
The 90s were ~30 years ago. American economic and military capacity ain't what they used to be, and alienating your allies and friends is starting to look like a poor strategy.
>The 90s were ~30 years ago. American economic and military capacity ain't what they used to be
You're totally wrong about this when you look at the numbers. EU's economy was on par with the US about 20 years ago. Now it's only half the size of the US.
USA spends more in their military than the rest of the world combined. Also the only country which used nuclear weapons of mass destruction. You must fear them.
When all your military spending can't help you win against a third-world country (USA in Afghanistan) or a single country 1/3 your size (Russia in Ukraine), it really makes you wonder if all that spending is justified to uphold one big bluff.
Of course not. But I think it's also true to say if the US hasn't been willing or able to effectively use its military power at the margin to stop a historic enemy from annexing its neighbours with impunity, your average regional power doesn't have to worry about the US using its military power to dominate world trade.
"Peacekeepers" is obviously meaningless when there is no peace to keep, so the question is what happens when NATO troops attack Russian troops directly.
Nothing will change in the US if Ukraine falls tomorrow.
People love to cry foul when the US flexes it's might... then cry foul when the US takes a back seat... literally cry foul no matter what the US does.
If Ukraine is so important to the world order, why has Europe (you know, Ukraine's actual neighbors) not stepped up with their full military power? Why is Europe not threatening troops, missiles, aircraft, tanks, etc... even nuclear obliteration if Putin doesn't yield? Why is it the US has to swoop in, from half a world away, and save the day (again, and again, and again...)?
The US is not currently willing to send our citizens to die in Ukraine. Maybe Europeans should?
> People love to cry foul when the US flexes it's might... then cry foul when the US takes a back seat... literally cry foul no matter what the US does.
There's a difference between the US invading Iraq and US aiding a country being invaded.
Why can't the Germans send troops into Ukraine? Or the Brits (for all their grandstanding and bluster)?
Why must it be the US?
If "everyone" thinks Putin isn't going to stop with Ukraine, then it would seem Europe has an existential crisis to deal with - not the US, thousands of miles away...
1. Because whichever country does go in, it gives everyone else in NATO an excuse to do nothing in response to Russia subsequently going to full war with whoever it was that went in. Strategic vs tactical response in local political sphere, short-term tactical benefit of using such an excuse comes at long term strategic cost.
2. Right now, each individual European power is in a state of "Oh no, Russia's probably 3-5 years away from attacking us if Ukraine falls, and it will take us 5-8 years to be ready to defend ourselves". The UK, for example, has a 136k active and 32k reserve personnel in total, while Ukraine forces have suffered ~400k wounded and ~50-100k fatalities.
Both points become "we can only intervene directly as a joint act from multiple nations".
That said, if the USA were to leave NATO, I wouldn't be overly surprised if rest of NATO may issue a joint declaration that Ukraine is now under their combined protection, nor would I be overly surprised by an alternative outcome such as NATO being functionally replaced with Article 42 of the Treaty on European Union: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex%3A...
And also, much of Europe is, in fact, sending aid (and arms) to Ukraine. All the other stuff is about troops on the ground.
There's plenty of threats by Putin to use first strike nuclear weapons if NATO troops directly engage Russian troops. So the current approach is indirect: British "military advisers" train Ukranians in the use of British Javelin missiles, but don't pull the trigger themselves.
Even a non-nuclear direct conventional war would get very messy very quickly. NATO would have to seize Kaliningrad and Belarus, start interning Russian nationals, rush forces to hold the Baltic states, and so on. It's not complicated to say "this will be very expensive and deadly, so we're not going to do it unless absolutely forced to".
European states are now re-arming (the irony of fate is that it's now US policy for Germany and Japan to re-arm), but that is going to take a while.
Article 5 of NATO (an attack on one is an attack on all) has only been invoked once, by the US.
So why did NATO members send their militaries to Afghanistan?
The real reason is that most conflicts never happen. Or are resolved before ending in a full war. Either the US or a European NATO country sending in troops would muddy the conflict so much that the risk of escalation is huge.
You are taking a short sighted view on what it means to be a super power.
If Putin wins in Ukraine, it will show everyone that the US is incapable to hold even a weak enemy such as Russia to account. It is irrelvant that you frame it as a choice rather than a failure.
Europe has been doing more than the US in absolute and relative terms to prop up Ukraine but it hasn't been enough to help Ukraine win. As a European, I would want our governments to put soldiers down and end the war, but Russia has been successful in the information war to make too many citizens afraid to enter with troops.
The US hasn't been saving the day for anyone without ulterior motives for a long time (ever?). You make it seem like it were generous moves to counter mostly Russia or e.g. ensure access to middle eastern oil.
The US has never spend money on its allies which it didn't believe has a large return. So the current Republican administration's view to reduce engagement is actually hurting themselves. Classic lose-lose.
> The US is not currently willing to send our citizens to die in Ukraine
The US is currently not wanting Ukraine to win for a single reason - it’s personal to Trump. So much has happened that we’ve collectively forgotten that it was Zelensky said “No” to Trump on the phone when wanting to find any dirt on Joe Biden helping Hunter in business deals.
> Nothing will change in the US if Ukraine falls tomorrow.
It certainly will when Putin moves on to invading Poland or Finland. The whole point of holding the line at Ukraine is because everyone believes Putin won’t stop there.
After the unexpected difficulty of the Ukraine war, how likely is it that they would try to extend themselves even further, against stronger countries than Ukraine?
More likely than if they lose in Ukraine, that's for sure. Because the lesson they will have learned is that invading countries is a winning strategy. They were deluded enough to invade Ukraine, they are deluded enough to invade Poland.
"Putin is too sensible to invade Ukraine" was the argument people were making the day before he did. My guess is these are the same people who now say "Putin would never invade Poland".
The Bush administration was looking to "win" in the Afghanistan by doing nation building, which was never going to work, and certainly wasn't going to be accomplished by military means. Obama and Trump both chose to kick the can the road, to not pay the political cost for "losing", Biden ended the conflict, and paid the political price.
But if the US had a different objectives, every human settlement in Afghanistan could have have been radioactive ash by September 12, 2001. Or, more realistically, the US could have gone in, killed all (for some value of all) the local elites as a warning to leaders elsewhere about the costs of harboring terrorists, and then immediately left the country in the same sort of chaos that they eventually did a couple of decades later. Kabul delenda est was always accomplishable.
The only people who should be ashamed of the their performance in Ukraine are the Russians, and the Europeans, for failing to be able deter or respond to the Russia on their own despite having an economy five times the size.
US interests are perfectly well served by seeing the Russian military mauled for a generation at the cost of aid, much of it material that was going to be decommissioned anyway, that costs roughly what Americans spend on golf in a given year (Once you throw in the costs of drinks on the 19th hole.)
Anyway, US arms sales are up since the start of the conflict, Russian sales have cratered.
I mean we rolled over Afghanistan the problem is fighting a war "humanely". Hard to accomplish anything with both hands tied behind your back. Just like in Vietnam the USA's ability to wage war is only limited by what it's local population thinks is "fair".
Absolutely. Everything the OP mentions as a reason to continue trading with the US is also a reason for Europe to trade more with China. Historically the argument for not doing that is "look at their very different values and how they bully and threaten their neighbours, and remember that if you do business there their government will happily crush you with its arbitrary power as soon as you step out of line and even at the import/export any trade deals they do make will be them openly trying to screw you" The US isn't exactly in a strong position to continue making those arguments about why the world's other superpower is different with a straight face.
The US doesn't need to be cut out of world trade altogether (it won't be obviously) to lose a lot at the margin, with the chief beneficiaries ironically being the country the current US administration most hate...
More than what? Europe trades a tremendous amount with China in the status quo. The argument you mentioned is real, but the EU never subscribed to it in the first place; they've consistently stated (e.g. https://ec.europa.eu/commission/presscorner/detail/en/STATEM...) that trade with China is very important and they have no interest in decoupling, although they'd like to lower the trade deficit.
Well yes, and so does the US. But Europe has certain significant restrictions on trade with China in sensitive areas, and levies its common external tariff on Chinese imports. China would love those restrictions to be removed and to get a broad trade deal.
And other countries that consider themselves broadly aligned with the West have considerably less decision-making inertia than the EU
I don't think China would love to get a broad trade deal. Analysts in both Europe and the US generally agree that the Chinese government cultivates unbalanced trade as a matter of policy. (Indeed, one of the things that's supposed to happen as part of the US-EU "trade deal" is joint action on metals to counteract persistent Chinese overcapacity.)
A broad trade deal would be unbalanced in China's favour; they manufacture more and at lower cost. But the US isn't exactly selling the message of being the better partner right now.
Neither of them are acting like good partners right now, thus the trade disputes. Smart money has to be on the US getting a less crazy leader sooner than China stops pursuing its long-standing mercantilist ideas.
Maybe I'm not understanding what you mean by a broad trade deal? As of 2023, a large majority of imports from the US and close to a majority of imports from China were tariff-free. (https://ec.europa.eu/eurostat/statistics-explained/index.php...) The remainder are on goods that the EU doesn't want entirely free trade in for some reason or another. I could definitely imagine a scenario where China follows in Trump's footsteps and bullies the EU into pushing their tariff-free percentage higher, but I wouldn't call that broad and wouldn't expect it to produce radical shifts in the import-export activity of EU businesses.
Oh and TSMC is on an island they claim is their own. Great: an Intel that has TSMC as its largest single shareholder is essentially wholly under the thumb of the State Department.
> Great: an Intel that has TSMC as its largest single shareholder is essentially wholly under the thumb of the State Department.
They already are. The US defence industry buys from them no matter what. Which is why the US needs to ensure their survival. The concern isn't that Intel survives or not (the US would prop them up no matter what), but that they also remain on the cutting edge and the US doesn't lose out if, say, Taiwan falls to China.
It will not work out over the long run. This is corruption; it breeds corruption, and corruption creates victims. Victims don't put up with it forever and as the old cold case appeal spiel goes, "alliances shift over time".
More prosaically, in the short term: TSMC are now effectively compelled to acquire Intel entirely or at least a controlling share, right?
Unless Trump's shakedown requires them to own 49% but then bans them from owning more than 50%, which would be the end of the USA as any sort of free market -- and I concede that is possible, because the USA now has a leader who acts more and more like an autocrat -- aren't TSMC essentially compelled by their own interests to find the just-greater-than 1% somewhere?
If you're blackmailing me into owning almost all of something but not getting control of what I owned, I think the logical next step is to forcibly gain control, yes? Because it turns the tables.
Not least because acquiescing even to buying 49% paints a target on my back.
Trump is not saving Intel: he is guaranteeing it is going to get broken up and sold off. He is destroying it. (More to the point he is immediately tying its existence to the success or failure of his own Asia-facing foreign policy, which means he is effectively asserting control over it)
TSMC is not going to get over the 50% threshold because it has no free will in this whole matter, as the very existence of Taiwan, and hence of TSMC, depends on the political will of the US.
Otherwise I fully agree with you, this will definitely not work out in the long run, but who cares about the long run anymore in this day and age?
But they have to try, right? Otherwise as you say, they are essentially operating under Rubio and Trump's control as a tool of the State Department.
The other important thing about this is that it dirties Intel almost immediately with presidential cheeto dust. So the value is going to fall over the long term, and this isn't the last sell-off they will have to do. Can you stop TSMC or a stalking horse for TSMC buying up parts of the rest?
Why would China annexing Taiwan have any direct effect on TSMC ?
I'd imagine they would be happy to have TSMC still selling to NVidia, Apple and AMD, and therefore a powerful lever in case of future US export controls/etc.
because even without deliberate sabotage a war in Taiwan would shut TSMC down for at least a decade. Changing the toilet paper supplier can drop yield by 20% until they sort it out. How do you think a warzone will affect it?
TSMC built a fab in Arizona that in 2 years was up and running delivering chips to Apple, so it doesn't take that long ...
Obviously a protracted or nasty war would have a severe impact, but it's hard to see why China would want to harm TSMC, even if worse case for US they stopped them from exporting.
you're assuming way less action from the US than there would actually be. it's not about the exports, it's about the supply chain to supply a fab. they need euv machines, wafers, thousands of specifically sourced chemicals etc.
it's not about what China wants, it's just not feasible to operate a fab in a warzone
It won't work out because the people in charge are the dumbest motherfuckers imaginable. They are utterly convinced that every one of their stupid ideas is brilliant, that they know everything, and that the way forward is to liquidate anyone who has the audacity to say 'no' or 'you're wrong' to them.
That's not the roadmap to good management of anything, as literally anyone who has ever worked a job will tell you. How people can see an amalgamation of all the traits they despise in a peer or leader that they actually have to interact with, and go 'oh yeah this guy should be running the entire country, this will end well' is mindblowing.
The empire can run on fumes and momentum... for a while. No company or country is so exceptional that it can survive enough mismanagement, eventually you burn through the furniture, and piss away whatever lead or competency you had.
I'm not sure they're convinced that every idea is brilliant. They're convinced that they have to convince everyone else that every idea is brilliant, because if they don't, everyone else will wake up and realize that many of their ideas are in fact not all that bright.
I don't think at this point it's safe to say that they are actually playing 3-dimensional chess. There is plenty of evidence that indicates that they are stupid enough to believe their own bullshit.
It seems like the tariffs are at least one-dimensional chess. The supposed rationale for the numbers was widely ridiculed, but now it’s clear that the numbers didn’t matter as long as they’re large. The tariffs have no rational basis as tariffs, they’re just a convenient stick for extortionate demands like this one.
The US margin on economic power isn't all that great, by GDP/PPP it's a long way behind China.
Though from the POV of economic coercion, the question is probably more like "what's the USA's import/export market like relative to all my markets including domestic?", which is going to vary wildly by industry.
> Ally with China, Iran and Russia to fight the US?
Replace Iran with the EU, and yes, some or all of them.
> EU as much as they dislike the US, has a laundry list of urgent domestic issues like Russia,
Urgent, but affordable.
> no cheap energy, no tech industry,
Energy isn't meaningfully worse than anyone else, lots of tech but it's mostly local rather than global in scale
> ageing population, economic stagnation or even decline,
Like everyone else, including the USA
> collapsing welfare system
News to me. Also: Wasn't the USA's supposed to collapsing since Obama took power?
But also, not a unified welfare system over all member nations of the EU.
> illegal immigration leading to a rise right wing extremism leading to crackdowns on freedom of speech and censorship.
Is it, or is that a narrative? And specifically, is it doing this worse than the USA today?
If per capita was what mattered, the US would be kowtowing to each of Luxembourg, Singapore, and Ireland. The US does not, because "per capita" isn't as important as "per government".
The mean wealth/income per person in the USA is indeed higher than China.
Who knew "Running America like a business" had so much in common with the Chinese Communist Party? Banning books, blocking access to websites and apps, protectionist tariffs to support local business and now forcing foreign competitors into joint ventures with failing local companies.
The economy of "corruption" and "coercion" is Neoliberal Economics 101. Send your regards to pseudo economic theory from the Chicago School of Economics (ie, Milton Friedman); and to Reaganomics/trickle down economics.
Both Friedman[0] and Reagan[1] were strongly opposed to tariffs and most forms of government intervention in the economy. Hard to imagine either of them supporting the current administration's policies.
Well, I am British and have studied a tiny bit of my own country's history... so I do.
But consider who in the world really loves the British. You don't need much time to make a list. Or even a paper and pen.
The main difference between the British Empire and the American Empire is that the American Empire is being led by a man who believes tariffs are a tax on foreign countries and retail prices can be cut by more than 100% and remain positive.
The most charitable explanation is that -- because as a malignant narcissist his grasp of past, present and future is really kind of broken -- he's talking about reversing hypothetical gains, and because the numbers sound big he doesn't care that it doesn't make any sense to the listener, and his team will twist themselves into pretzels to make it true anyway.
(I haven't yet heard them make the claim that he means reversing gains, but I would expect them to. Heck if it was my job to make his Truth Social messages make sense, that is what I would say.)
But honestly his grasp of fractions and percentages has long been known to be worse than early era ChatGPT.
The most worrying aspect of the Trump era for the markets should be that he treats numbers as entirely flexible according to his mood, when the market needs them to at least be consistent.
But then they knew this before he was elected the first time; he is famous for admitting he assesses the value of future business at any time based in part on how he feels about it (which is reminiscent of the way Musk assesses future valuations, future delivery dates for full-self-driving, future sales of robots etc.)
So it's not a political thing at all. He hasn't always been a Republican but he has always been like this with numbers, and anyone who has ever subjected his words to any kind of scrutiny should know it.
The longer Trump creates a legal black hole carve-out for Tiktok, the less anyone will want to buy it. Because he is and this action is transparently corrupt, and it taints the buyer.
And that is true of the participants of any of these forced transfers; they paint targets on their back for future manipulation by the Trump executive. (Which increasingly feels like it should be described as a regime)
Something working well* (at least for well-connected people, relative to the general populace) when world GDP was two orders of magnitude lower does not mean it works well (for the general populace) today.
You were downvoted, but you were right in pointing out that the quote was taken out of context. Here's the full context:
"Nixon should be told," Kissinger said, "that it is probably an objective of [Clark M. Clifford, the Secretary of Defense] to depose [Nguyen Van Thieu, the President of South Vietnam] before Nixon is inaugurated. Word should be gotten to Nixon that if Thieu meets the same fate as [Ngo Dinh Diem, a former President of South Vietnam whom the U.S. initially supported, but who was later murdered in a CIA-backed military coup], the word will go out to the nations of the world that it may be dangerous to be America's enemy, but to be America's friend is fatal."
Kissinger was motivating why the U.S. should continue to support Nguyen Van Thieu, the dictator of South Vietnam; but today his words are frequently taken out of context to suggest a self-aware take of U.S. foreign policy.
when I read "how it works" I assume you mean that it was a success? bailing out GM in the way they did pushed their novel vehicle platform technologies to fall to the wayside and for them to refocus on combustion. New brands were on the horizon, there was a hope for a new modern vehicular order but the midrange of the market was squatted by GM's insufficient vehicles. I don't think 2008's bailout worked, at all.
The government made a shit ton of money from 2008 by not letting them fail and buying preferred shares. Hell fannie mae and freddie mac throw off tons of cash for the government to this day.
Didn't we _not_ let industries fail during that time? How about the Big 3 bailouts and the emergency infusions for banks? And these actions decidedly helped save our economy.
Whether it's good from a moral perspective or a long term perspective I guess is another matter, but I suspect if the government hadn't stepped in, we'd still be in the throes of the subprime crash even today. This is speaking as someone who is deeply anti-corporate.
Kick the Tariff dog too often and it will bite. Huge Aluminum/copper/wood tariffs have moved Canada to export diversely. These supplies are tight and this year's production has been purchased in Europe/Japan/Asia who are short. Since the USA can not plant magic 1 year wood seeds = new growth 10-20 years out. Houses use a lot of wood/copper/aluminum = a bad 2-3 years comes knocking. Plastic(PEX) can make pipes, but they are a lower quality. Bamboo grows fast and can be used for glued under pressure wood for most uses, but it is not cheap made in the USA
If tariffs really raised money in the way Trump pretends then the US government could surely just grant Intel a direct share of all tarrif revenue raised from sales in to the US from Tawain?
Of course the reality is you're just taxing Americans to subsidise Intel at that point, since tarrifs are a tax on Americans and not foreigners.
So it really does raise money like trump "pretends"? Unless global trade ends, those tariffs will raise lots of money for the government. Even if it is the american consumer who ultimately pays the tariff.
- have most wanted product and fab pipeline of the century
- be bullied by little Orange
- ???
- no profit
The US administration heavily underestimates how much every nation on the planet wants TSMC. This deal is so bad, just from a comparison point of view.
It's not like the EU, India, and other nations don't want chips. That's what the egocentric US administration doesn't seem to understand.
You can't bully nations into submission, at some point the winds will change.
Guess what, that already happened. The media in the EU is making a joke out of US politics on a daily basis since the start of this term.
Taiwan is under a tremendous pull by China, both non violent and violent. Any push by the US is a push towards China.
Trump has no idea what he is doing. HE can not replace Brazilian coffee, but at least it is "only" coffee. Not being able to replace a fab is a precarious situation.
Is he imagining invading Taiwan? China would consider that an invasion to its territory.
I don't think Trump cares if it "works" economically long term. He cares about what he can extract personally and what he got upset about on twitter when he woke up. That's it ...
He was quoted regarding environmental concerns something to the effect of "I'll be dead by then".
I think that's really his POV. If you plan to live longer than Trump, he's really not for you.
There's going to be a lot of undoing actions that were taken because of an old bully who thinks the world is a celebrity game show.
Surely tariffs for 3 more years are less damaging than buying a sinking ship?
South African right wing farmers sold a story of a genocide and reverse racism, now they wish losing business because their exports are more expensive from the very tariffs that are a negotiation tactic to get their government to abolish or repel sine laws.
I just bought my first AMD chip in years (a 9950X3D), the last one I had was from the early FX series. After how poorly those FX chips performed, I swore off AMD for a long time.
Ryzen definitely caught my interest when it first came out, but Intel still had the edge in performance and stability back then, so I stuck with them.
That started to change with the 7800X3D, and now with the 97/9950X3D lineup, AMD is clearly ahead. I'm not even going to mention the "new" Intel chips.
Funny how things shift. I'm firmly in the AMD camp now.
And everyone I know is in the same boat. Probably 3-5 years ago Intel was the only "real" option for the people I know, now it's the exact opposite.
Probably longer, Ryzen 3000 came out 6 years ago. That was the beginning of AMD's CPU dominance IME. I built my first AMD system ever in 2019 - I had been Intel-only since my first computer (a PIII)
You are probably right w.r.t when they started becoming competitive. The reason why I mention the x3D chips is because Intel has literally still has no comparable product for them. If your application / game / whatever benefits from the extra cache, AMD blows intel out of the water.
Imagine if Taiwan/TSMC or even ASML were acting this childish. Refuse to sell chips or modern chip making technology to American companies = America would probably go to war with Taiwan or the Netherlands lmao. One trick pony.
Trump's tariffs forced a historic trade deal between Japan, China, and Korea, three countries that historically hate each other. If Trump managed to accidentally force Taiwan and China to settle their differences, it might be a sign of the rapture.
Tariffs kinda make sense when you have a deficit in a widely available item. Big trade deficit with Bangladesh? Sure you can buy cheap textiles from Thailand or Vietnam or something.
Unfortunately this approach does not work when you lack a viable domestic alternative and you're up against a monopoly.
What will the US do if TSMC does not blink? Not buy TSMC made chips? Obviously that is impossible, so the logical conclusion is that American consumers will end up paying the tariffs.
>so the logical conclusion is that American consumers will end up paying the tariffs.
That’s been the point all along… they are significantly raising taxes on the bottom 90% of Americans and most are too stupid to even understand it. Gotta pay for those tax cuts for the wealthy somehow.
It has nothing to do with stupidity. Stop painting people as idiots because they exist in one of the most information hostile environments in human history.
This isn't some natural state that's unrecoverable. The people you describe have been given a highly addictive media environment tailor made to engender outrage and drive behavior. It shouldn't be a shock when most people cannot resist it. The first step to changing it is not writing them off or insulting them for being had.
> most information hostile environments in human history
Is it though? East Germany comes to mind as well as the rest of the Cold War countries behind the Iron Curtain. China seems to be pretty hostile as well. In the US, it is still much easier to find real information that counters the propaganda than it is in any of those other countries. There's no Great Firewall to bypass. You don't even need to do anything anonymously. Yes, the current administration is doing its damnedest to pull the wool over the eyes of their followers, but it's only effective for them. Nobody else is fooled nor stopping their publishing of the opposition to the propaganda.
What you're describing is an Orwellian dystopia, where a boot forces you to think a certain way. We live in a Huxleyan dystopia where there is so much so much to distract you that you become submissive.
The demographic collapse will likely lead to artificial wombs and llm powered vulcan style teaching pits crossed with diamond age primers. Huxley was more prescient than I thought when teading brave new world. I think the nation that has its primers teach the vat-made labor force rhetoric, logic and critical thinking will have lower gdp, but higher stability.
I disagree, this is neither an Orwellian nor an Huxelian dystopia, but a Gibsonian AI megacorp dystopia
Read “The Island” for a different flavor of Huxley.
This would be nice, however we get both the boot AND the flood of information.
Yes, this, precisely. Our increasingly dystopian present features a fair amount of Big Brother, but Brave New World's soma is what drives and enables it, along w/ aspects of Gilliam's "Brazil"....
There is also so much that's womderful and amazing and positive. No light w/out darkness, "no mud, no lotus", etc. -- which IMHO it's increasingly important to focus on, deliberately.
> East Germany comes to mind as well as the rest of the Cold War countries behind the Iron Curtain
Psychology around ads and how to manipulate peoples thoughts were not nearly as well understood at the time. Large scale studies based on data collected of peoples behavior on computers has lead to dramatically better ability to manipulate and nudge people to do what you want.
The information environment was more oppressive there, but it was easier for people to have their own thoughts since the marketing was forced and blatant but way less manipulative and devious.
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I never said or meant to imply by not specifically saying something that the opposing view was unavailable back then. That's just willfully trying to twist the narrative to a purpose I don't know why it is necessary. But since we're here, we can compare/contrast.
RFE/RL could broadcast whatever it wanted. If you received it and heard the contrary views from what official stance was, you can pretty much just accept it. You couldn't just go and search for more information in a browser/app. Seeing video of things just wasn't happening over the air on your wireless. You couldn't jump onto social platform of choice and see images in real time. Information is so freely flowing today it is a joke to compare the two.
>Typical American response confidently knowing literally nothing of what they speak of
Sadly, this reads from someone with a person grudge that has nothing to do with the conversation. If you honestly think there was more information freely available then as compared to know, you've just disillusioned yourself for whatever reason. Yes, there was resistance back during the Cold War. Fax machines FTW. That still just does not compare to how freely flowing information is today. To call today the "most information hostile environments in human history" is just nonsense. How can you even compare it?
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> Honestly, you have no idea what you're talking about.
> The idea that people in authoritarian countries are clueless about what’s really going on is arrogant and frankly ignorant.
You can't comment like this on Hacker News, no matter what you're replying to. The guidelines clearly ask us to avoid swipes and name-calling like this. If you wouldn't mind reviewing https://news.ycombinator.com/newsguidelines.html and taking the intended spirit of the site more to heart, we'd be grateful.
Hi there, thanks for the nudge. I agree those two sentences could be worded differently to convey the message.
Sincere thanks!
"Great Firewall"... thats propaganda my friend. American Internet is not open either, its just censored differently
The Chinese Internet is censored far more than the US internet in degree and kind.
Up until recently with SCOTUS saying age verification is not rights infringing, I would have disagreed. Even with that, what else is blocked by default? It's easy to get hyperbolic in partisan discussions, but seriously, what else is being blocked that counters administration propaganda? Yes, Trump admin is changing data on the websites it controls. That's the right of any sysadmin to control and publish content they want. It would be a real bit of censorship if the admin said no other websites anywhere in its jurisdiction could publish contrary data. You can scream about FB/Twitt...er,X/socialPlatformOfChoice making decisions on its website, but again, I go back to it's their site to manage. You can choose to use it based on those decisions, but again, those are not the only sites offering contrary data.
I mean, maybe this way is worse. I can see how it could be far more obvious that the propaganda is BS when it's being pushed at you from every outlet and every form of media. Makes it more clear that it's controlled.
Yet at the moment where there is still diversity, people can make the mistake of thinking that the propaganda is just a difference of opinion so perhaps trust it more.
To me the propaganda is still blatant and there is only an engineered illusion of diversity, only inasmuch as it keeps people opinionated on the things that don’t matter. There’s also no foundational or universal desire for diversity, so alternative propaganda contexts may induce different focus areas.
> one of the most
ONE of the most. That you can highlight a few others where things might have been worse doesn't negate that claim.
Different kinds of hostility, no lesser in magnitude.
While i take your point about playing nice, it has a lot to do with stupidity: specifically ignorance, intellectual laziness, lack of curiosity, bias, anti intellectualism, inability to think abstractly, lack of education, lack of critical thinking, ideology, and a host of other things.
Almost all of which correlate in some way to 'stupidity'.
I posit that your first line is wildly wrong, but your message is broadly valid.
Just because someone has a different point of view than yours does not make them stupid. I know plenty of people that have different views of mine that are much smarter than I am, and engaging with them leads to interesting conversations. I can still think they are "wrong" at the end of these conversations, but I'd never call them stupid. Hell, the lottery is often described as a tax on poor people. Yet the vast majority of lottery players would never call it a tax. The vast majority of people that I've talked to that don't understand tariffs are not incapable of understanding the concept. They've only ever heard their information from one source that does not discuss tariffs in this manner. Once they hear other viewpoints not from a single source, they typically admit they are taxes and do not argue against it. It does not change their mind that they are still a good idea.
> Just because someone has a different point of view than yours does not make them stupid.
True, but I'm not sure what that proves. Some people who have different points of view than I do have come to those points of view via reasonable means, and some of their PoVs might even be more consistent with reality than some of mine.
But some people are actually just stupid. Sometimes it's for understandable reasons, but sometimes it's for reasons that the GP laid out, and that's sad and unfortunate, and makes life difficult for the rest of us. I think there are a lot of people like this, and I'm afraid that public policy is in no small part driven by these people's susceptibility to propaganda, and their inability to think critically.
It’s not “a different point of view” to think that tariffs get paid by the other country. It’s not “a different point of view” to loathe Obamacare and like the ACA. It’s just ignorance. When the information is easily available, it’s willful ignorance. When they won’t obtain the information and they still hold strong opinions and vote accordingly, it’s at best stupidity.
How is it not a different point of view to think that healthcare should be tied to one's employment as opposed to all people should have access to affordable healthcare? We can discuss if Obamacare achieved what it wanted to do as I believe it was not very successful, but it at its core is a different view point. Yes, people believing other countries pay the tariffs are clearly not understanding of how tariffs work. But then you went made some clearly erroneous comment that ruined everything else just to get back to stupidity. Which by your standards means you must be stupid too for continuing to put forth a clearly wrong point.
That’s not what I was saying. Obamacare and the ACA are the same thing. The ACA is the official name and Obamacare is an attempt at a derogatory nickname which became common. Hating one and liking the other is an inherently contradictory position. And yet it’s one a lot of people hold. That’s not a different point of view, that’s not having even the most basic understanding of the thing you have an opinion about.
That’s democracy though, everyone gets a vote, even if you’re a doofus.
Right, but it puts rational people who seek to govern in a very uncomfortable position when they're up against an adversary who is happy to seize power at all costs, including weaponizing ignorance, ideology, polarization, conspiracy theories, and a complicit media apparatus, and then engages in blatantly un-democratic tactics like gerrymandering and the filibuster, and all the rest of it.
Basically when all or most of the facts are on your side, how do you balance the need to indulge stupid talking points and perspectives so that you can "reach" people, while also not inadvertently conceding ground in an attempt to meet a person where they are?
IMO it’s an incentive problem - it takes effort to be knowledgeable but the practical benefits are next to nothing. But being in a group of ignorant people is actually probably pretty fun, not to mention the dopamine hit of outrage.
Ideally being informed would be both easier than it is today (less misleading crap, more trustworthy structure to think about what issues are relevant) while also being more rewarded somehow.
Of course. I’m not saying they shouldn’t have a vote. I’m just saying they are in fact doofuses.
I disagree with your blanket assumption that consumers always pay for tariffs. In my experience working for a major garment importer, we kept retail prices the same even after tariffs were added. Why? Because competition from local brands forced us to absorb the cost ourselves. Sure, that's not how every industry works, but saying consumers always pay is an oversimplification. It really depends on the industry, pricing power, and competitive pressure.
Whether tariffs are paid by the consumer is a bit pointless. The incontrovertible fact is that tariffs are paid by someone in the importing country, whether the importing business or their customer or a middleman or some combination. These dingbats are out there thinking that these tariffs will be paid by China or Canada or whatever.
But that's not true, why would it be? Tariffs are paid by someone in the supply chain. It's not obvious that the payer is in the importing country.
"Tariffs are paid by someone in the supply chain" is the most accurate way to put it because it reflects how things really work in practice. Sure, the importer is the one who physically pays the tariff at the border, but that cost doesn't always stay with them. Depending on the situation, that expense can be shared, passed on, or absorbed by others involved in the trade.
For example, if there's a 35% tariff on a $100 item, the importer technically owes $135. But the exporter might lower their price, maybe selling it for $70 instead to help offset the tariff and keep the business deal going. In that case, the exporter is basically covering part of the cost. On the flip side, the importer might just raise the final price and make the customer pay more...or better yet, assume the cost due to intense local competition.
So even though the importer pays the duty upfront, who actually feels the cost depends on how the parties involved respond. That's why it makes more sense to say someone in the supply chain pays. It's not always the same person every time.
They are paid by the importer. It’s possible those costs will be passed along with higher prices, but you can’t really pass costs back.
Of course you can. Competition means exporters can lower their prices to help mitigate the tariffs in order to beat their competitors.
They can do that without tariffs too.
But why would they if they don't have a competition on price without a tariff?
Why wouldn’t they have competition?
Even if you assume perfect competition costs like tariffs can be passed back to producers.
Imagine a demand and a supply curve. From the perspective of a producer outside the country the tariff effectively shifts the demand curve, but doesn't affect supply. That's going to lead to a lower price at equilibrium.
Of course, from the perspective of the consumer it's the opposite situation, the supply curve shifts which leads to a higher price at equilibrium.
Both happen simultaneously, who pays most of the tariff depends on the elasticity of the supply and the demand
OP said:
> loathe Obamacare and like the ACA
they were not arguing for or against obamacare, they were pointing out the laziness of people that don't realize that Obamacare _is_ the ACA, but somehow hate the former and love the latter.
> How is it not a different point of view to think that healthcare should be tied to one's employment as opposed to all people should have access to affordable healthcare?
Please explain how members of a low-income household would rationally and knowingly advocate to eliminate the only access to healthcare they can afford.
Then, if you are able to present a coherent argument, try to explain that in a stupidity vs diverse point of view, this stance is indeed not founded on stupidity.
> Just because someone has a different point of view than yours does not make them stupid.
He never suggested that. You defended these voters by saying they gladly accept the propaganda information diet, not that they have well-reasoned differences of opinion.
No, that's not my defense. You're putting words in my mouth. I'm saying that because they voted for someone that you disagree with for whatever reasons does not automatically make them stupid. They could have voted for someone for a totally different reason than tariffs. Now their guy is doing something they don't know anything about and now they are personally getting attacked. Whether they know anything about that topic or not does not make them stupid. If they attempt to argue without being fully versed by quoting what the face on TV tells them, again, that doesn't make them stupid. It just makes them very bad at debating. Look at all of the "man on the street" comedy interviews that are out there. Most of these people have no clue about what they are talking about, but just want to argue against the other side. A lot of the people are definitely not "very smart" but that's because they are cherry picked for that purpose. There are a lot of people that voted for this guy because the last guy was just unable to articulate much of anything and did not put forth a lot of confidence in pretty much anything. Knee jerk reactions usually have some pretty negative consequences. Just looking at current polling suggests there are a lot of people that voted for this administration yet are not happy with what is going on. Yet you are saying they are stupid. If these people were really onboard with "other countries pay the tariffs" there would not be negative polling numbers.
All I'm saying is stop painting with a broad brush in that anyone voting for a party is stupid. I'll defend people voting for who they want or even voting against someone they don't want. To call them stupid is just stupid.
Ugh I did put words in your mouth because I was reading nosignono's comment. Apologies.
Still, arbitrary_name seems consistent about not judging people for ideological differences but rather for choosing not to be accurately informed. I.e. he is not saying "they're dumb because I don't agree with tariffs" he's saying "they're dumb because after Trump promised to make us rich with tariffs, they didn't bother to check how duties are collected." You seem to agree with this to an extent.
> All I'm saying is stop painting with a broad brush in that anyone voting for a party is stupid.
I mean, it's four broad brushes right? The dupes, the single-issue voters, the identity voters, and the ones who believe in whatever his policy happens to be. I don't think it's fair to say they fall into a single bin but they're not all snowflakes who cannot be characterized en masse.
> I'll defend people voting for who they want or even voting against someone they don't want.
Okay but what about the ones who vote for what they don't want. The ones who voted Trump to release the Epstein files. Or to balance the budget. Or to end the Ukraine war day one? They took a look at his first term, listened to his campaign promises, and decided, "surely he will deliver!"
> Once they hear other viewpoints not from a single source, they typically admit they are taxes and do not argue against it.
I think you're being overly optimistic here.
You're leaving out my qualifier of the people I've talked with.
I appreciate you trying to "remember the human" which is one of the top rules of hackernews and every single comment replying to you isn't bothered that they call a whole swath of people stupid.
How can we heal, change, and recover from this without reaching out and understanding their POV.
As Orwell has stated ages ago, there is a group of people who will only accept the truth when it confronts them on the battlefield. The unshakeable belief in previous priors leads many people to only face certain truths when forced to through lived experience.
There is la video circulating of a business owner making fun of the Amazon concept of showing thd amount tariffs add to the final price to the consumer. This guy in this video says that number is going to be 0 on his website because his product and the stuff used to make it is "Made in America". The next video is literally him bitching about how some of the Made in America stuff he needs to make his product increased by a grand in just one month. And he like, "why in the fuck are these Made in America affected? Something's messed up here."
At the end of the day, this is a business owner who was aware that the biggest online retailer in America said tariffs are going to affect the price of products the American consumer buys. If this guy can't be bothered to dig a little deeper to save his business, it's hard to expect other people that are a couple degrees removed from the action to do so as well.
Even after observing and understanding, healing and recovery may be impossible. Change is still inevitable of course.
> It has nothing to do with stupidity.
In addition to being rude, its not a particularly clear word.
So I coined "idiodidact", to specifically describe people who have personal selectivity with regard to being teachable. (Greek/English usage: "idios"/personal choice + "didact"/taught)
Any resemblance, to any other word, would be a coincidence.
Brilliant. I'm stealing this.
This guy insults.
In a way it kinda does though - like definitely the information ecosystem distorts things, but some people do not have (or do not exercise) the critical reasoning skills to decipher what's true from what's not. Or what issues are actually important from those that are meant to just distract - not everyone can tell the difference and see how the incentives actually point to what's going on. reply
The education system failing people is part of the issue. Why would you want people to have critical reasoning skills if you want to control their behavior through outrage.
Looking at the agenda of the party currently in charge, the system isn't failing people. It's performing as intended. When you do not want the masses to be educated, you defund those that are in charge of educating to the point it has no other outcome than to come to a grinding halt. As intended. After all, the numbers stop going up when you stop counting.
I'm often reminded of a conversation my arrogant younger self had with an Englishman I was having a bit of back and forth banter about Yanks vs the sun setting on the English empire. I asked if the Empire was so great, why did all of the colonies end up revolting? His answer was simply, "we taught them how to read." Once the masses can read and think for themselves in an educated manner, they tend to no longer put up with being trodden over for much longer. So the answer is clearly simple to stop educating the masses.
Those people may not be innately stupid in the sense of not being able to learn or understand things. But they have been rendered functionally stupid by the media, propaganda, and politics. I actually find that state quite unrecoverable.
I see things as incentive problems, including this.
People are incentivized to be intellectually lazy since there isn’t really any personal reward for making the effort (your vote is on the margins practically meaningless, even if you’re “right,” whatever that means).
But there is great reward for staying ignorant (dopamine hits from outrage media and camaraderie with the large plurality of similarly intellectually lazy people).
How do we make it so that having well reasoned opinions is actually rewarded commensurately?
> Stop painting people as idiots because they exist in one of the most information hostile environments in human history.
Two things can be true at once. Being force-fed bullshit doesn’t necessarily make somebody an idiot but it also doesn’t necessarily make them not an idiot.
Perhaps, but the problem is that Americans really love their propaganda environment. The anger makes them feel alive. In some ways it's worse than the USSR, where everyone knew the propaganda was dull bullshit and all the interesting artistic work was in trying to subvert that.
> The people you describe have been given a highly addictive media environment tailor made to engender outrage and drive behavior. It shouldn't be a shock when most people cannot resist it.
Although I also take issue with labeling people "stupid," I also take issue with the blanket assumption that people are victims of the media environment. Both take away people's agency in their own way.
Instead, I'll ask this uncomfortable question. What if a good chunk of these people would prefer to believe a convenient lie over an inconvenient truth? If so, what does that say about them and their morals? Is that better or worse than being labeled stupid or a victim?
Absolutely there is a strong component of cognitive dissonance: the truth hurts, lies are soothing.
The truth? They do not care about basic right and wrong. They voted for a rapist, a felon, a vile insurrectionist. There’s no morality and we know this based on how they’ve voted.
But also the unwillingness by their friends and family to call them out promotes non-accountability. For everyone.
And, imo key, is the fact that this goes both ways. I've had conversations with both blue-collar types as well as white-collar types where both groups fail to grasp nuances and economonico-historic context. It's TikTok turtles all the way down. Breaking through echo chambers is harder than ever and there are no incentives to do it.
I’m not in the US, so I don’t know what it’s like from the inside but from the outside it’s so comically obvious how straight up stupid and brazen trump and his cronies are that it beggars beleif.
How can so many be so gullible?
They're not gullible. They are in full agreement with the leadership's desire to punish the "undesirables" in their society and purge the values they don't agree with. That they too will eventually suffer the consequences eventually is less urgent than knowing that the "others" feel threatened right here and now.
It’s a cult.
But also, they’re being misled. Most non-Trumpers coddle, forgive in advance, and invite Trumper friends and family to the usual social functions. This is permission. It’s helping everyone normalize the depravity.
In a very real way there’s no conversation happening because one party has removed themselves from rationality and the other party has broadcast they don’t care.
There will need to be enormous amounts of pain to get either party to snap out of it.
This is bullshit. It would be partly valid if it were just about "information hostility" but its not. People are making choices not just due to ignorance or misinformation, but based actively on spite, hatred and "fuck you got mine". People are deciding not to necessarily better their own situation but to harm others. It is selfish, myopic and yes, utterly fucking stupid.
Normalising this way of behaving means that yes, if you're in the group that benefits from today's decision you're ok, but nothing stops you from being in the out-group tomorrow. And if your goal is inflicting harm, well tomorrow that harm will be inflicted upon you.
Stupid is as stupid does.
I can think something is a good idea for any number of reasons, it can also still be stupid.
Sure instead of calling them stupid I’ll just tell them they’re addicted to toxic media and we need to regulate the media for their own good because of their inability to resist it.
At this point they're not "being had." They are deliberately and belligerently ignorant. It's way past time to stop giving anyone a free pass on supporting this malevolent clown.
Democracy's no fun when your guy doesn't win, right?
What democracy?
People voted for orange man, were you not aware?
Some people voted for the orange man. Whether the vote count was fair remains in question. https://electiontruthalliance.org/
People voted for Hitler, people voted for Hamas. Being voted for doesn't preclude being malevolent to the voters.
Why do you think this was the first step? That these folks have not been engaged with: information, compassion, alternative news sources, pleas to think twice about what they read on Facebook? Why do you think these folks haven't listened to Trump himself over the past 10+ years, or lived through previous elections cycles, including Trump's previous term? There's no way you can claim the wool was pulled over people's eyes this time around.
Also, acting self righteous while demanding decorum is rich considering how this admin promised to and followed through on completely dehumanizing huge swathes of people as its base cheers on. Please, display one ounce of good faith.
> Stop painting people as idiots
1/3 of the voting population elected a known criminal, known sex predator, suspected child rapist, and known economically illiterate imbecile. The information may be hostile but it was widely and easily available.
At least 1/3 of the US voting population are idiots. Obviously there is a subset of that voting base that made an intelligent decision knowingly and complicitly elected Trump despite the extremely serious red flags, but I would still consider them to be idiots.
You forgot insurrectionist too. He literally tried to overturn an election with violence, and tens of millions of Americans just shrugged that off.
"Stupid" seems like a pretty fair way of describing that. If someone watches media that outrages them, misinforms them then causes them to make stupid decisions then the consequences are very much on their head. It is well know that the people peddling strong outrage are basically scumbags in it for the money and not the sort of people who should be listened too if you want to achieve long term success (which is mostly the domain of trusting optimists).
There are a lot of high quality media sources out there that don't promote outrage.
It's what they call everyone else (shrug). Why mince words.
> It has nothing to do with stupidity. Stop painting people as idiots because they exist in one of the most information hostile environments in human history.
No. Someone refusing to spend 30 seconds understanding how a tariff works is the result of an idiot. My 10 year old figured out how they work in under 5 minutes. There’s literally no excuse for a grown ass adult to refuse to educate themselves on the subject.
“This media environment” doesn’t prevent them from typing “how do tariffs work?” in their search engine of choice and reading the first result.
I just googled "How do tariffs work?" I got hit with several college level vocabulary words describing tariffs in both the AI summary and my first result. It might be less of a problem, if we had adequately funded schools.
The full AI summary from DuckDuckGo for "How do tariffs work?"
>Tariffs are taxes imposed by a government on imported goods, making them more expensive to encourage consumers to buy domestic products instead. The costs of these tariffs are typically passed on to consumers, resulting in higher prices for imported items.
I don't see any "college level vocabulary words" and it directly says that it makes goods more expensive and the costs are passed on to consumers. Maybe Google's complicated answer is part of the "media environment" being criticized.
The LLM systems being what they are, you can ask google "how do tariffs work, using eighth grade words" and you get a very clear and correct explanation without the college level words.
In simple terms, think of a tariff like a special tax a country puts on goods it buys from another country. Here's how it works: When a country wants to import something, like cars from Japan or clothes from China, it has to pay an extra fee (the tariff) to its own government before those goods can come into the country. This extra fee makes the imported goods more expensive than products made in the country itself. Why do governments do this? To protect local businesses: By making foreign products pricier, the government hopes people will choose to buy things made in their own country, helping local businesses grow and create jobs. To make money: Tariffs can also be a way for the government to collect some extra cash. To get other countries to change their ways: Sometimes, countries use tariffs as a way to pressure other nations to follow certain rules or to stop unfair trade practices. Example Imagine a bicycle store in the US wants to import a bicycle from another country that costs $1,000. If the US has an 11% tariff on bicycles, the store would have to pay an extra $110 (11% of $1,000) to the US government, making the total cost to bring the bike in $1,110. This makes bicycles made in the US seem more affordable by comparison.
domestic looks pretty challenging. /s
Edit for the sarcastically challenged among us.
I can't tell if this is a sarcastic comment. Not only is "domestic" a relatively simple word with a straightforward definition, but also the point of the original comment that "consumers will end up paying the tariffs" is still clear from the summary regardless.
Like the beer?
>> What is a tariff? A tariff is essentially a tax imposed by a government on imported goods. When a product crosses a country's border, the importing company pays this fee to the customs authority before the product enters the domestic economy. (start of Google summary)
I'm guessing Google has a "be accurate" as its prompt, whereas DDG has a "be ducky"?
Google, what's a "college level vocabulary word"?
For crying out loud, information is so accessible. The inability to find and discern at least some level of truth (or at least gather multiple contrasting perspectives) is laziness, AND stupidity.
I'm all for better schools, a better information ecosystem, and more tolerance, but why are we bending over backwards to tell malignantly underinformed people it's not their fault? It is! It is their fault.
"malignantly underinformed" I like that phrase :)
I asked Google to "explain tariffs in simple terms" and it sure did. A sixth grader would easily get it. Here's the response (and now I'm wondering whether a GenAI system could create a short animated video or slide deck that could become a TikTok):
Tariffs in simple terms
A tariff is like a special tax that a country places on goods it buys from other countries.
Imagine this You're buying a toy made in another country.
The government of your country might add a tariff to that toy's price when it enters the country.
This makes the imported toy more expensive than a similar toy made in your own country.
The company importing the toy pays this tax to the government.
However, they might then pass some or all of that cost onto you, the customer, by raising the price of the toy.
AND stupidity is you being intentionally ignorant.
People have much better things to do than look up words, look for dissenting opinions one something the face on their TV tells them. There's taking the kids to _______ practice. There's TV shows to keep up with. There's an infinite feed of content to scroll through. There's plenty of other things that they would prefer to do themselves than whatever it is you would prefer them to do. That does not qualify as stupid. To me, what is stupid, is everyone here calling others that have differing view points than their own stupid. You are willingly using that term in the same way you say they are willfully not looking things up.
If you’re too busy to find out what tariffs are, fine. I get it. But then don’t have an opinion on the matter. Don’t vote for an absolute shithead because you think these things, which you’re too busy to find out about, will be great for the country.
Having an opinion is a constitutional right. You can't tell people not to have an opinion. That is stupid. People vote for many reasons while a lot of those vote on a single issue. If the person receiving their single issue vote means there's baggage to get their one hot button item then so be it. I voted for someone not for what they represented so much as it was a vote not for the other person. The person receiving my vote definitely didn't make me all smiley and thinking panacea was on the way. In fact, my last 3 votes were this way.
To paraphrase Randall Munroe, “it’s not literally illegal to do this” is the weakest possible defense of something.
I sure as hell can tell people not to have an opinion. That is my constitutional right. If someone has strong beliefs about something and votes accordingly, and they don’t put in the effort needed to find out the basic facts about the matter, then they are stupid and that’s bad.
Who has a single issue and doesn’t understand that issue at all though?
Man, I really feel like people are deliberately obtuse in this thread. You can have a single issue while that issue is not tariffs, yet everyone is harping on you about why you voted for someone so in favor of tariffs. That's not why you voted for him. Just look at the polling. MAGA world is not a fan. That's the die hard base. Some of these people's single issue was Epstein and now they're really pissed. They know everything about their one single issue. You're the one that can't keep it straight
Talk about deliberately obtuse! We’re not criticizing these people for voting for someone in favor of tariffs for other reasons. We’re criticizing them for voting for that person because they’re in favor of tariffs despite not knowing what tariffs actually are. Your response of “maybe people voted for other reasons” is completely missing the point here.
The original post was painting anyone that voted for the current admin as stupid. The conversation also assumed that anyone that voted for POTUS did so because of tariffs. That's clearly not true. Are there people that voted for POTUS while also having no clue about tariffs, yes and this is not in dispute. What is in dispute is that anyone that voted for the cheeto-in-chief is automatically stupid. It helps to keep up with the thread. This assumption that everyone that voted opposite of how you did is automatically stupid is what is actually stupid.
Given your extreme misunderstanding of my Obamacare vs ACA comment in another thread, I’m not confident in your interpretation here.
> It might be less of a problem, if we had adequately funded schools.
Just want to point out that giving more money to an underperforming school only makes it worse.
==giving more money to an underperforming school only makes it worse.==
Is there no circumstance where more funding would help an underperforming school? It certainly “can” make it worse in instances, but there are many reasons that a school might be underperforming. To imply that more resources would fail to help any of those problems is quite a leap.
What if the student-teacher ration is 40-1 and more funds allows for another teacher, might that make the school better?
What if the school is only open for 4 days due to low funding, might an additional day of school make it perform better?
What if a school has multiple disabled students slowing down the curriculum, but no funds to give them personal support, might more funds help it perform better?
Stop infantilizing them and taking away their agency.
The grift economy loves it when the narks are blamed.
A narc is the person who turns in their peers to the police. Did you mean the "marks"?
It's a good thing we, the enlightened of HN, can see through the bullshit clearly though. /s
With tariffs, it's entirely possible that the loss of blue collar jobs due to offshoring more than offsets the cheap toys those folks get to import in exchange. Especially when the cost of housing, education, and medical care is rising regardless. It's not uncommon to hear labor leaders rail against NAFTA and be pro-tariff[1] for this reason.
[1] https://uaw.org/tariffs-mark-beginning-of-victory-for-autowo...
It's also possible to be pro-tariff and recognize that Trump's policy is whatever keeps him at the center of attention, downstream consequences be damned.
A concept of a plan, a verbal agreement, even just a phone call is better than a binding trade agreement that lasts 20y. Because the former provides what matters most: distraction from the things that will put Trump in jail and a feeling of power and importance.
No, they are idiots. Not at media consumption, but idiots at life.
There are certain life skills that can be considered “smart” like revisiting your established opinions when presented with new information, or knowing that encountering a new piece of information from a single source doesn’t carry the weight of encountering it in dozens of places, or that making a mistake doesn’t guarantee that your existence is doomed but been presented with a learning experience.
The “stupid” folks refuse to take the simplest steps to better themselves. They refuse to self-evaluate honestly. That’s the root cause. This stupidness results in them being duped and misinformed.
Therefore, when one encounters an uninformed and duped person, it’s not out of line to consider that person “stupid”.
So when people like OP say that people are stupid, it’s not a dig via victim blaming. It’s a judgement that they’re clearly being stupid, that their poor life skills need work because they ended up misinformed.
it feels fair to call tariffs a VAT that goes away if the manufacturer produces things domestically which seems… reasonable? raise revenue and encourage domestic manufacturing.
yeah, it sucks that I can’t buy a JetKVM right now. otoh being dependent on (often) adversarial nations for everything we buy is also not ideal.
It's not as simple as that. IIUC the tariff is no where near the difference in the cost of production in the US. https://youtu.be/uDGkkqllQa8?t=1144&si=vxhJH-JgMf6Pk9A7
> produces things domestically
Like, assemble domestically? Or actually source 100% of the parts, supplies, building materials, machinery, etc domestically?
Manufacture domestically will result in price increases, which again hits the bottom harder than some of us here. Is this what we want?
Manufacture domestically and whatever the price increases is goes back into the local economy. Somebody is going to be paid for that work. Also, money circulating is what makes an economy strong.
Mm strong copper mines taste good.
This isn’t even accurate. So far, suppliers and middlemen have been absorbing most of the costs of the tariffs (look at CPI).
So basically the US government was able to take a slice of the profit from everyone but the consumer.
Seems pretty smart to me?
Short term elasticity and long term elasticity aren't the same thing.
Whoever has the greater elasticity doesn't pay much of the tax.
In most markets, long run elasticity of supply is very, very, very high. So that means demand side (consumers) end up paying the tax.
But short term elasticity of supply can be low-- dominated by capital costs and inventory.
Sure that's potentially one effect- but I'm not sure it's the most important.
The other effect is to reduce international trade and the kind of national interdependency that creates, and so makes, large scale war highly unlikely.
The US is also trying to use it's economic power to force people to choose sides ( cf secondary sanctions on India ).
So while Trump might be anti-forever wars he is busy creating a world where WWIII is much more likely.
With this administration, it's probably just more blackmail, in the form of "it would be a pity if nobody came to the rescue when China eventually puts its Taiwan plans in motion! (Not that playing ball is a guarantee of anything either)".
Every promise of this administration is worthless, so why even bother? Either they protect you, because they don't want the chip tech to fall to China or they don't.
Buying half of Intel isn't going to change anything
The meta of Trump mercurialness is convincing counterparties they should do whatever they can to make him happy, even on unrelated matters.
I think it's a braindead, 4th-grade way to run international negotiations, but it is a way.
People will forever take every bluff and proposition at face value though so it gets exhausting following online discourse, where everyone is trying to rationalize it at face value or spinning it into some grander conspiratorial geopolitical scheme. Doesn’t seem to matter how many times the outcome is dramatically different than the starting point with Trump, people want to believe and that’s what Trump hopes they do to get what he wants (basically some marginal gains through intimidation but largely what one could achieve through more traditional civil approaches when negotiating from a power position).
Exactly. I've made the case before that while it may be a temporarily winning approach in business (aside from becoming persona non grata with most banks' risk departments), it's a losing strategy in international geopolitics.
Because counterparty countries will still exist, you'll need to make future deals, and they'll remember the last time you fucked them over.
> it would be a pity if nobody came to the rescue when China eventually puts its Taiwan plans in motion!
Wouldn't that just mean that Taiwan has to choose between two villains, and China can take the advantage of this by changing its narrative and taking the position as a hero, protecting Taiwan from the US.
Taiwan really, really does not want to be part of China.
Or rather, they see themselves as the legitimate government of China, which is undergoing a temporary Communist junta. The separation was extremely violent. I mean, you saw the Three Body Problem.
The US fosters this, to retain a toehold there. Taiwan doesn't exactly love us for it, but they know which side their bread is buttered on.
> they see themselves as the legitimate government of China
No, they don't. But formally renouncing that position[1] makes them officially secessionist in the eyes of Chinese conservatives, adding pressure to invade. The One China fiction matters, though how much it matters is definitely up for debate. But it's a local minima, and rolling the dice comes with significant risk.
[1] At the state level. AFAIU, it's been renounced by several of the major parties in Taiwan, and when in power they've made movements at low levels of government that arguably contravene the policy. But it still remains the official position and its still enshrined in the Taiwanese constitution. And, yes, the US adds pressure to maintain the status quo as it would (might?[2]) be on the hook for the defense of Taiwan. But the majority of the population isn't in favor of formally renouncing it, either; the potential negative consequences are existential, and the material benefit is slim to none.
[2] During Trump's first term it was claimed he privately admitted that if China invaded Taiwan he wouldn't intervene.
This isn't blackmail. A security guarantee has value. Exactly what value is hard to say since the US is the only credible seller of such guarantees in this world order
Like with Ukraine? Like with Iran? The US has proven its word is literally worthless and beholden to the whims of a dictator.
At this point, Taiwan would be foolish to not start working on a secret nuclear bomb program. North Korea has proven its the only way to actually protect yourself.
Yep. Nukes for Taiwan is the only solution.
Nuclear proliferation and subsequent war is inevitable imo.
North Korea doesnt have nukes pointed at South Korea, they’re family. Likewise, Taiwan would never nuke China even if invaded.
China is being smart, it is modernising and growing amazingly fast, and Taiwan will be foolish not return to China peacefully in our lifetime.
I'm pretty sure giving nukes to Taiwan would be seen as an act of war by China.
No need to give them. TW can absolutely make them on their own, in fact they had at least one active project to do that and were forced to stop by the US.
I wouldn’t be even slightly surprised to learn they have a few MIRVs stashed away, pointed at Beijing, just in case.
Not sure why this is being downvoted … ?
*the US WAS the only credible seller
Whose security are we talking about here, though?
Wouldn't the value of the security guarantee in this scenario be a negative one for Taiwan?
https://news.ycombinator.com/item?id=31012442
https://news.ycombinator.com/item?id=35171512
Until you change president... Iran made several security deals with US...
> Tariffs kinda make sense when you have a deficit in a widely available item. Big trade deficit with Bangladesh? Sure you can buy cheap textiles from Thailand or Vietnam or something.
Sorry, how do they 'make sense'?
What's the problem with a trade deficit with Bangladesh? And in your example, you'd just shift bilateral trade balances around, without impact the overall trade balance of the US?
I could perhaps believe that an overall trade deficit is bad (maybe..), but I've yet to hear why bilateral trade deficits should matter, especially with places like Bangladesh that are not strategic rivals or are even allies like Japan or Taiwan or NATO.
Because of the Triffin dilemma: https://en.wikipedia.org/wiki/Triffin_dilemma
Trade deficits in isolation aren't good or bad but because the US has the world reserve currency it must supply it's currency to the world.
This basically forces it to have a trade deficit with everyone which over time can hollow out manufacturing sectors. Making the whole economy vulnerable to shocks and ultimately causing it to fail.
It's similar to "Dutch disease," where external demand overvalues the currency and harms tradable sectors.
It's not sustainable without careful policy management, and attempts to weaken the currency via tariffs, devaluation, or some other mechanism.
You might not like Trump or his approach but he is directionally correct and does have a powerful bargaining chip (access to the US market - which is basically on track to be the only 1st world consumer driven economy 5 years from now).
Doesn’t this assume tariffs are efficiently adapting to changes in the market? Markets, trade, innovation, even currency prices change all the time. Tariffs change every decade if you’re lucky and when they do there’s a thousand conditional statements baked in that make it even more disconnected from reality
> You might not like Trump or his approach but he is directionally correct and does have a powerful bargaining chip (access to the US market - which is basically on track to be the only 1st world consumer driven economy 5 years from now).
Interestingly, though, Robert Triffin International put out a paper essentially arguing that Trump's tariff approach is all wrong.
On what sort of basis do you make the claim that the US is on track to be the only 1st world consumer driven economy 5 years from now? What do you mean by a 1st world consumer driven economy, as opposed to what exactly?
I do agree that having tariffs on certain items to encourage domestic production definitely does work. The tariffs have to be consistent and on things that can actually be produced in the country.
The issue with Trump's approach is that its not consistent, has nothing to do with which products can be made domestically. Changing tariffs daily/weekly/monthly is not going to encourage domestic production.
> I do agree that having tariffs on certain items to encourage domestic production definitely does work. The tariffs have to be consistent and on things that can actually be produced in the country.
Compare and contrast https://en.wikipedia.org/wiki/Import_substitution_industrial...
Huh? The US gets to print money for free. They don't even need to have printer's ink any more, since it's all entries in a database these days. And in return they get real stuff from overseas.
And you want to tell me that this is somehow unfair for the US?
The US can print an arbitrary amount of dollars, if there's demand for them in the rest of the world.
Btw, focussing on dollars is actually a bit narrow. When Americans sell stocks or bonds to the rest of the world, that's also part of the trade deficit. So Americans aren't just exporting dollars, they are also exporting stocks and bonds and options and futures. Financial engineering is one of great American manufacturing industries.
Interestingly enough, despite exporting so many financial products (= 'trade deficit'), Americans as a whole still make more money from their foreign investments abroad that foreigners make on their American investments. To simplify a bit too much: foreigners buy low yielding American government debt, while Americans make savvy investments abroad.
> It's not sustainable without careful policy management, and attempts to weaken the currency via tariffs, devaluation, or some other mechanism.
Oh, magical tariffs! They can strengthen or weaken your currency, just as the plot demands. They also prevent hollowing out of industry, and cure toothache.
If you want to weaken your currency, just print more of it. It's much simpler.
> You might not like Trump or his approach but he is directionally correct and does have a powerful bargaining chip (access to the US market - which is basically on track to be the only 1st world consumer driven economy 5 years from now).
What does 'consumer driven economy' even mean? Could you make your prediction more concrete. Perhaps we can even have a little bet.
I’m just waiting for the 21st century versions of the ograbme act cartoons complete with turtles
>Sorry, how do they 'make sense'?
To the same extent that other forms of taxation make sense. I wish people had this same sudden interest in protecting the free market and maximizing trade when we're taking about income tax or sales tax or property tax, etc.
> I wish people had this same sudden interest in protecting the free market and maximizing trade when we're taking about income tax or sales tax or property tax, etc.
But people do have these interests!
Different taxes distort markets differently. Tariffs are one of the worst ways to tax. Similarly transaction taxes, like a Tobin tax or stamp duty, are bad.
Income tax ain't great, but it's ok. (Details depend on implementation.) Property tax is one of the best taxes, only beaten out by land value taxes. VAT is ok.
And, btw, a tariff designed to raise revenue is very different from a tariff designed to change the balance of payments.
Glad to see someone with economics knowledge! The best taxes are Pigouvian taxes on externalities. They not only raise revenue but distort the market in the right direction. Carbon tax comes to mind (though that's a tricky case as there is no world government, tax works best for local externalities like air pollution).
Well, for Pigouvian taxes to make sense, you first have to argue why in your specific situation Coasion bargaining breaks down.
Similar to how, if you want to use 'market failure' to justify your favourite government intervention, it actually comes with lots and lots of restrictions and only justifies a very narrow slice of possible interventions.
Thanks for reminding me of that, it's been a while since I read Varian's Micro textbook.
There are lots of ways for Coase to break down. Lack of clear property rights, transaction costs etc
If there's one product we have domestic alternatives to it's semiconductors. We're a couple nodes behind TSMC. Using US only foundries or paying a premium for TSMC is not the end of the world.
More people need to hear this. Similar argument when they tried to stop China from buying certain types of silicon - "Oh well... anyway!".
I am not American, nor am I Chinese. Both of those countries have the capability to make enough compute to do whatever the hell they want. I am, however, European...
So is ASML. You guys hold the real keys to the kingdom :).
Semiconductors are not fungible. Using US alternatives also means dropping all the AI plans and subsidies, at least on US soil. The big AI data centers would all end up in China, owned and managed by subsidiaries and leased back to the parent.
> The big AI data centers would all end up in China, owned and managed by subsidiaries and leased back to the parent.
Well does it matter where industry & technology are located (and who controls them) or doesn't it? The anti-protectionism crowd thinks no, it makes no difference if we make something locally, or import it. A stance not shared by any of the countries currently leading the semiconductor industry - or in the case of China, rapidly catching up.
Really? I was not under the impression that we had anything truly competitive. Could we make an iPhone, for example, using only U.S.-made chips?
I fondly remember my weird Razr-i with an Intel Atom CPU..
I can almost imagine we would have more trouble getting domestic phone screens, but I'm not doing any research to validate that gut feeling.
I think the biggest problem would be whether we could automate assembly enough to avoid having high labor costs on each unit
At $499 today no. At $490k in 1-2yr maybe. At $4.9m/unit by 2032 at up to 1k unit/yr, sure you guys can.
We couldn't make an iPhone because apple would refuse to cooperate, not because of a technical limitation. We could make a similarly capable phone though.
iPhone performance and battery life would likely slide back 5-10 years if Apple was forced to use Intel chips instead of TSMC today.
Not just that, the raft of features that may have to be disabled until that performance and performance per watt gets back to where it is today.
Complete nonsense. Intel 18A, were yields good enough, is competitive with TSMC N2.
> … because apple would refuse to cooperate…
Apple’s putative refusal to cooperate is surely not the only barrier here. I doubt U.S. consumers would pay a premium for a U.S. iPhone whether Apple thought it wise or not. But when the U.S. president’s branded Made in America phone comes out later this year I guess we’ll see. I’m sure the release is just around the corner.
All we’ll see is how gullible certain Americans are, since that phone won’t be made in America.
If the tariffs are high enough there won't be a premium. It also solves the deficit spending problem which needs to happen since no one seems to be able to handle the idea of any spending cuts.
Seriously, what is your basis for the assertion that we could do it here and Apple just doesn't wanna?
Oh? How many Android phones are made in America?
How about the new Trump phone?
It's about time we tariff Apple as if it's a Chinese company anyway.
I don't know why analysis like this doesn't go a bit deeper. Yes americans will pay more, but TSMC will also see less demand. Intel has it's own foundry, maybe it can start competing against TSMC, because now TSMC costs a lot more and intel's cost of manufacturing in the US to compete against TSMC can be recouped much better thanks to the new market prices set by the TSMC tariffs?
Government's shouldn't put up with monopolies either, if it wasn't for trump's political baggage, HN would be all over this I'm sure, TSMC is already investing on US factories which even without purchasing a share of intel, it would force them to use those factories and bring them online sooner. We've had multiple unfortunate wars due to dependence on foreign resources that don't have good/sufficient competition state-side, that is not a good pattern to repeat.
If TSMC doesn't blink, maybe they'll get their way for now but all their American projects and in general doing business in the US will be unpleasant and costly until 2028+. Which is cheaper? I don't know, I'm asking because a lot of opinion on the subject isn't talking/explaining about the actual numbers and nuanced economic considerations.
It doesn't work if you don't have 1:1 product, which Intel foundry absolutely doesn't. Not in performance, price or just ease of use. No one is going to risk years and billions to get it working on Intel, that's a sure way to lose your edge.
Companies (like Nvidia) will just raise prices and if demand drops they will divert more of it to countries like China and EU. And demand isn't going to drop much anyway for in-demand stuff like Apple chips or AI stuff. Best case scenario, they (not TSMC) temporarily eat the cost or spread it around.
This has nothing to do with Trump, it simply doesn't result in competitive local manufacturing. Increasingly rent-seeking AND subsidized, with no pressure to compete.
You didn't address the fact that they have state-side facilities slated to open in 2026? You also said intel "doesn't" not "can't" isn't it more reasonable that demand will force supply to adapt. Why couldn't intel compete before? and why can't it going forward? China is working on TSMC rivals (if they haven't succeeded already), the west should just sit on its hands and wait for a military conflict with china because of TSMC dependence? in the short term you're right, but change is long due.
Their US facilities are purposefully NOT bleeding-edge, and also cost more.
And this version of Intel can't, maybe a different one that fully separates design and foundry could. The best solution long-term would be to directly subsidize foundries, with the right incentives to acquire different customers (how TSMC or Samsung operate). They just might get lucky if everyone hits a hard scaling wall.
Whatever happens, tariffs and bans are the absolute worst incentives for innovation and growth.
Monopolists or companies with some degree of Monopoly will absorb some of the tariffs as opposed to passing on. Putting tariffs on monopolists makes some economic sense.
Tariffs on commodities though don't.
Monopolies with strong demand for their products will happily pass on the costs, and then some. The delicate balance between encouraging demand while maintaining margins.
On the political side of things, they can use their influence and customer base to pressure the government. Silently eating the costs isn't good for them or the market as a whole, long-term.
I think the problem with Intel's foundry is that it cannot produce the same quality and quantity at the level of TSMC.
I was looking through the list of fabrication technology for the latest CPUs, and while they say they are 3nm, it is using TSMCs technology (Arrow Lake S: Fabrication process: Compute Tile (Contains the CPU cores) TSMC's N3B node.)
My guess is that Trump is trying to save Intel by forcing TSMC to buy them under the guise of "I'm forcing companies invest in the US".
> Tariffs kinda make sense when you have a deficit in a widely available item. Big trade deficit with Bangladesh? Sure you can buy cheap textiles from Thailand or Vietnam or something.
What exactly does this acomplish?
What would TSMC do if they couldn't sell chips to the USA? It cuts both ways, like most trade negotiations.
If they could no longer sell in the USA than they would no longer have a reason to care about US restrictions on selling chips to other countries. China would be happy to buy many of the chips the US was no longer buying.
Is “don’t buy stuff with TSMC chips” really a valid option we have?
Isn’t that basically “stop buying high technology” to a large degree?
We can use older processes if we have to. We'd be taking a step back of... maybe 5-10 years? Computers 10 years ago were not that much slower than they are today. Volume would be a bigger concern than performance. Maybe it'd force the tech industry to start writing more efficient user-facing software instead of depending on the incremental advancements made by chip designers and semi fabs.
> We'd be taking a step back of... maybe 5-10 years? Computers 10 years ago were not that much slower than they are today
There’s more to the world of computing than your laptop.
Stepping back to 10 year old GPUs and server CPUs would be a massive handicap on the country.
> Maybe it'd force the tech industry to start writing more efficient user-facing software instead of depending on the incremental advancements made by chip designers and semi fabs.
It’s not about the speed of your laptop loading Slack. Large scale compute is already squeezing as much performance as we can out of server hardware.
Not to mention there wouldn’t even be enough capacity to make all the chips we need even if we went with slower chips.
And that's my friends is how to crash the stock market.
> Is “don’t buy stuff with TSMC chips” really a valid option we have?
Not sure that TSMC would want to do that either! We're probably their biggest market, even allowing for China.
> Isn’t that basically “stop buying high technology” to a large degree?
I think you're right, to an extent, at leastt in the near term.
However, we do have (and especially used to have) various fabbing here in the States, from Samsung to Intel. Especially the latter has been neglected, but these changes would probably accelerate on-shoring and perhaps bring some of it back here.
Don't forget that TSMC is in a country that is probably going to go through some significant instability in the next few years. From a business continuity perspective, we'd need to consider availability and supply chain management with the strong possibility of a major vendor being located in the middle of a hot warzone.
I’m not arguing TSMC is in a good place geopolitically. I agree there’s a huge risk there.
I just don’t think “don’t use TSMC“ is a realistic choice at all right now.
That’s like telling someone in rural Montana “just don’t use a car”. If you want to live a normal life it’s not very doable.
The amazing thing about (near) monopolies is that companies don't have to worry about folks voting with their wallets anymore.
Those pesky customers and their demands have been dealt with!
Sell to the other 95% of humanity I guess.
But what percentage of total sales do they make up?
“ What will the US do if TSMC does not blink? Not buy TSMC made chips?”
I think their assumption is that TSMC will certainty give in to any demands. Taiwan needs US support to defend against a much worse (and unfortunately just next door) adversary.. China.
That’s probably true, though I’d pay a 50% tariff just to get working drivers vs. whatever Intel was shipping 5-10 years ago.
AMD and Apple offer that; Intel still(?) does not.
I've been using Intel hardware on Linux for more than 10 years. The instances of driver issues that I can think of are very very few and they were never related to anything Intel did.
I wonder what hardware you've been buying. I've tried Apple, Dell, HP, Lenovo, Intel OEM, Toshiba, ASRock, and a half dozen others. I never saw any of them run Windows (OEM or from Microsoft), Linux, or MacOS X (on the Mac) reliably.
The most recent Intel machine that did work reliably is now 15 years old (and humming along nicely, for what it's worth).
Sure, they had Linux drivers, but they also would do crap like kernel panic, unsuspend in my laptop and overheat, screw up USB, and so on. They did it under all operating systems.
My current desktop is an AMD system on chip. It's great, except it has an Intel WiFi/Bluetooth module. There's been a bug open against all Intel Bluetooth modules for about a decade:
They fail to advertise themselves in a timely fashion at boot, so the intel driver (Linux or Windows) doesn't see them so you have to keep rebooting until it does (or write a bash script that retries modprobe).
Here's the manual for the wildly popular ASUS bluetooth dongle that works around this crap by not using an Intel part. Look at page 1 where they show you how to disable the Windows driver for your existing Bluetooth radio, which apparently can't coexist with a second bluetooth adapter under windows:
https://www.asus.com/us/supportonly/usb-bt500/helpdesk_manua...
(Manual revision U24085 will do -- it's the top in the list).
I'll give you one guess: Which brand has the bug that requires the workaround?
The most important pieces, IMO: Asus or Gigabyte motherboards, integrated video (because GPU drivers are usually unstable), Intel Ethernet (avoid realtek), Intel K series unlocked processors - not overclocked, if anything I run them underclocked for cool, quiet and efficient operation. And use quality RAM, that's pretty important. Debian Stable.
Yes it's a tax on consumption and when applied to everything the same way it's essentially a VAT. The admin keeps telling that EU will pay, India will pay but at best they can do is to weaken their currency so the goods become cheeper and it compensates for the tariffs US importers pay.
Arguably, US consumers are super consumers and maybe it will be better for everyone if Americans consume a bit less? I don't think that it should be necessarily bad for business, maybe it's time to switch to world building instead of consuming, maybe as so many people works so hard we as species should gradually move on to use our output for longer and enrich our lives with each new tool instead of consume more and more and keep working the same or more. Eastern Europeans are or used to be a bit likte that, have a slow paced life, have low GDP output, on paper economy and everything is bad but actually have a great life if you have a house with a garden and some stuff you bought 30 years ago and still functioning good enough.
There's no problem with having a trade deficit against one country. There's no need to balance each country, just as there's no need for people to have no imbalance in daily exchanges. It's as if you were going back to a barter economy where there was no money.
more likely than not I think this ends with a vague promise, a loudly declared victory, and a quiet defanging of the promise or just outright ignoring it in the future
tsmc(taiwan) will blink for the same reason europe did and japan did, and for the same reason india and brazil did not.
when you take a step back and look at the deal breakdown, this is protection money not a trade negotiation.
Different countries have different considerations.
Most of these "deals" aren't deals and rather frameworks. And given the tumultuous nature of bilateral trade where countries might not follow on their promises. Happens all the time and countries end up arguing at the WTO. So, it is hard to say whether Europe or Japan "blinked". Given the timing of the European deal it might be to help Trump so that he does not have egg on his face for not having 200 deals by 1st August.
India wants to cozy up to US and was one of the first countries to start trade negotiation. Trump-Modi dynamic has been good. The sticking point is agriculture and dairy. Both countries subsidize agriculture and diary. And in both countries farmers form a big chunk of politically aware voters. For the Indian government it is political suicide to even nod along like Japan and Europe. But if you hear Trump he keeps saying it is about Russian oil.
Brazil might have the same issue. Historically, US was the largest soyabeans exporter. But last time Trump got into a trade war with China, the country has moved away from US exports and started buying from China. So, again even the appearance of a deal might be problematic for the government.
And reading this side by side, maybe US farmers are not that economically aware?
> the same reason india and brazil did not.
India's issues with the US are for completely separate reason.
Bihar elections are coming up in 2 months [2]. Any incumbent government in India can't give trade concessions on agriculture during peak campaigning season in a swing state that can impact elections in 2-3 additional states as well as the general election in 4 years.
The main Indian exports to the US (pharma, electronics, and services) are all tariff exempted so the economic pain is marginal.
The only export that's hurt is textiles, but frankly, textile workers don't matter in Indian elections, especially when most of them leave for 3-4 months each year to work on the family farm and get social benefits based on their agrarian status and voter rolls that they never updated.
Realistically, India and US will sign a deal either after the Bihar elections, or after making ag/dairy a separate track from the rest of the deal.
Trump needs to keep the cheeseheads of Wisconsin happy just like the NDA needs to keep Bihari farmers happy through direct subsidizes [0] and hardline agriculture policies [1], hence why both the US and India will maintain maximalist positions on agriculture and dairy.
My hunch is a comprehensive deal will be announced during the election media blackout in the run-up of the Bihar elections or shortly after the election.
[0] - https://www.thehindu.com/news/national/prime-minister-narend...
[1] - https://indianexpress.com/article/political-pulse/why-makhan...
[2] - https://www.eci.gov.in/election-symbol-details/2066
The objective is to force TSMC to accelerate their US production plans.
> ... American consumers will end up paying the tariffs
This has always been the case. I have never heard of a company absorbing tariffs on behalf of consumers in the day and age of "trickle down economics".
Well, MAGA supporters have never heard of consumers paying tariffs:
https://x.com/dieworkwear/status/1951851958559703117
So far indications are many companies are eating the tariffs, for now.
Even making them visible has drawn the ire of Trump a few times already.
But I generally agree that it can't go on forever / not how it works historically.
Eating the tariffs by firing workers means more out of work with less purchasing power and prices are going up too. It's fail all the way down.
I'm actually surprised that some prices are even lower now than they've previously been.
I don't think most people actually have a solid understanding of what is and is not affected by which tariffs.
If I understand correctly, most of the tech stuff is effectively exempt; and Canada/Mexico tariffs don't apply to most items that are covered under "the rules of origin" certifications under USMCA (the successor to NAFTA).
I think the biggest hit has been the elimination of the de minimis rule, which now makes it difficult and/or impossible to get anything directly from China by USPS, be that cheap clothing or small electronics.
I don't think companies know what is affected and when... except when the invoice comes. The tariffs have been a moving target, some announced and never occurred.
Most kicked in on Aug 1st. It takes a few weeks for the international supply chain to turn over.
Eating the tariffs to avoid punishment from the government is just price controls with the dash of lawlessness. Something will give and it will be either profits or prices.
A lot of them are "eating" them in the margins of the unreasonable "inflation" increases they used to see how much the public was willing to pay for their products. (Normally, this would be okay in a functioning capitalist market except we've let way to many companies gain a monopolistic position with no real market competition to force a reasonable middle ground between profit and elastic demand.)
I much prefer “import taxes”.
These arm-twisting games are exhausting and expensive.
These tariffs are presented as trying to bolster domestic industry but that's a smokescreen. The primary goal is to use this to replace income taxes so the rich are freed from their onerous (/s) taxation.
The bonus is that it's a tool for punishing perceived enemies and inciting interested parties to purchase favor from the regime to try and ease them back.
https://www.cnn.com/2025/04/28/business/taxes-trump-tariffs
It occurred to me that tariffs are really a backdoor way of introducing consumption tax (aka sales tax, VAT, etc). It has been a conservative policy goal for many years, as the conservatives believe that income tax penalizes entrepreneurship, but the politics make it virtually impossible to switch to because consumption tax is regressive, and it is a huge change. The tariffs debate and the general political atmosphere created a misdirection, resulting in both income and consumption tax being with us now. The next development will be the politicians discovering to their horror the high levels of taxation, and abolishing the income tax. Brilliant!
The tariffs are largely just a means to getting world leaders to beg Donald Trump for relief. I can’t imagine many things making him happier.
The baseline of no trade deficit between all countries and the US makes no sense, since countries are not uniform in resource or production. eg Lesotho/Bangladesh won't achieve a trade balance with the US when they produce what the US wants and don't consume enough to balance it out. https://www.youtube.com/watch?v=Ah9SrbCB7-k&t=1147s
Let's say this was the starting point. Almost immediately, this strategy of trade balance was dispensed with, leaving most countries with some random tariff rate that wasn't strategically decided.
Many recognizable countries, specifically the ones that the administration targeted for political reasons, ended up with adjusted tariffs based on politic. This was due to the administration figuring out they had overstepped or thought that they were too soft, when the influence wasn't effective. When it became clear the economics were being ignored, Trump called them some epithet that meant "unreasonable" and abandoned the tariff tactic in all but rhetoric.
What was the point? The most predictable sequence of IMMEDIATE events were likely the point. I believe the point was to try to convert the global crises (political, economic, and social) that existed around the world to purely economic concerns for simplicity. This was paired with jamming up the entire global trade system, which would allow the administration to listen for the squeakiest wheels. It was supposed to be an efficient way to prioritize immediate problems such that the administration would not have to learn about and weigh all the problems in the world.
Short and long term, the tariffs have accelerated the de-dollarization of the world economy, they has amplified income inequality, and have destroyed supply chains across multiple sectors. The replacements are necessarily less efficient (value is cannibalized by tariffs). It was a lazy and poorly considerer tactic, but it might have achieved the goal, given my assumption of purpose.
The issues that were raised to the administration were largely, left unsolved. The most prominent of which are the Ukrainian, Taiwanese, and Palestinian fronts and the weakening of the US hegemony due to trade conflicts. The good trade relations with traditionally friendly nations have been damaged, long term. Canada, India, China, most of the EU have made moves to distance themselves from the US chaos. Some strange side effects, like this weird buy in to american companies is a side effect of the show, rather than a specific intent. I can concede it wasn't all bad. The US did see some new corporate inroads into a few countries. Notably concessions from Mexico, who was willing to meet the US goals in achieving a trade balance (more or less).
Overall, it's possible the tariffs succeeded as a self-serving tool of the administration, but failed in serving the US as policy. Maybe I'm just wrong, but maybe Trump is just this simple minded and his administration is playing into the fallout, as it advances their 2025 goals (or whatever).
> Not buy TSMC made chips? Obviously that is impossible
Why do you think that? Trump clearly wants them to use Intel's 18A which is likely similar to TSMC 2 year old N3P, which is not an impossible option.
The same 18A that their CEO is axing?
https://www.reuters.com/business/retail-consumer/intels-new-...
That's 14A, not 18A, and it's not being axed, but questioned in what appears to be a game of chicken.
Sounds like they are axing 18A for external customers, which is what Intel needs to be an alternative to TSMC:
>Tan's overall strategy for Intel remains nascent...Shifting away from selling 18A to foundry customers would represent one of his biggest moves yet.
18A is not getting axed, they'll use it.
Them? Nvidia and AMD? RTX 7xxx would then be based on an old Intel process? Would buy these?
All of Apple’s stuff?
even if Intel’s processes worked just as well, there’s no way they have the capacity to take over for all that stuff.
We’d be back in a huge shortage.
I would buy that if I could get it in 30% lower price.
Just buy hardware that's a few years old and you'll basically get the same thing.
On the surface, buying 49 percent of Intel wouldn't infuse the company with any capital. It would just bail out investors.
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It will be a heck of a RICO case
Why would this post be flagged? It could of course just be automatic due to disingenuous flagging by users, but any administrator could see there is no reason to flag this and then unflag it afterwards.
It actually wouldn't. The sale price will be pretty close to the current market price, maybe %10 more. If the Government kicks in funds to underwrite the deal (say a loan to TSMC) then the deal would likely happen exactly at market price.
That means investors who sell are getting the current low market price or a little bit higher--- they will still be down the massive amount.
This is really bailing out current management-- letting them be replaced by the more capable TSMC people and getting an attaboy for helping the US government strengthen the alliance with Taiwan, keeping peace in the region.
> This is really bailing out current management-- letting them be replaced by the more capable TSMC people
The trouble with a competent organization buying a decadent organization is that leadership at the decadent organization is often much better at winning political infighting (they have a lot of practice).
So it’s very easy to end up in a situation where the disfunction metastases up into the parent.
At the very least, executive attention is finite and splitting attention like this is distracting to the parent executives, which harms the parent organization.
Yes, the Boeing buying McDonnell case :(
But the buyer can just unconditionally lay off all the top brass, exactly for that reason. The layoff can be more of a golden parachute kind, to prevent any sabotage.
Why don't we ever see management suddenly locked out without any ability to get into their accounts or buildings?
They failed the duty, no golden package or BS.
But TSMC isn't a design house. Intel has both fab and design. TSMC's management could only help out on the fab side.
> Intel has both fab and design.
The fab part is not a good deal since Intel struggles a lot with it and they are not even on par with what TSMC was producing a few years back using older processes.
I would guess in this deal, TSMC would produce the chips and fire all the Intel foundry people.
TSMC was founded on the principle of never doing design. The promise to never steal customers from their clients.
Who would TSMC buy the shares from?
Would they buy existing shares from investors? Would they really find enough investors willing to sell shares at market price? I doubt it. There would be a lot of investors that would rather hold than sell at market price. Market price is the current minimum price an investor is willing to accept. Not the price that all investors are willing to accept.
Would they buy new shares issued by Intel? That seems more likely to me. That would be a bailout to Intel.
>If the Government kicks in funds to underwrite the deal (say a loan to TSMC) then the deal would likely happen exactly at market price.
If you need taxpayers to make a deal happen, then it is not happening at market price, by definition.
Who would TSMC buy the shares from? Investors or Intel? See my comment here: https://news.ycombinator.com/item?id=44809007 .
I would not be surprised if some member of the Trump syndicate has acquired a significant stake in Intel shortly before this announcement.
This is like an old fashioned Civilization game trade. Taiwan gets a significant ownership in a blue chip US company, TSMC should then take %51 control over intel, and turn it around. The US gets a stronger position with China such that china attacking Taiwan would be like bombing Apple or Google. The USA will go to war over that.
Only the willingness to go to war, stops aggressors. War is terrible and economic competition is the path to peace, but if you can't defend yourself you will get destroyed.
Only the willingness to go to war, stops aggressors.
I'm pretty sure that's why China is saber-rattling so openly. I don't endorse the CCP's arguments for Taiwan being part of China (which rest on a very flimsy historical foundation and are mostly tied to the ROC government fleeing there), but I fully understand their dislike of being militarily encircled by the US. Other Asian nations appreciate the status quo under a Pax Americana, but have made it clear that they are less than enthusiastic about participation alongside the US in any military conflict centered on Taiwan.
> The US gets a stronger position with China such that china attacking Taiwan would be like bombing Apple or Google. The USA will go to war over that.
If TSMC has effectively transferred their technology to Intel, doesn't this remove a reason for the US to defend Taiwan?
The US has been defending Taiwan since before integrated circuits were invented. Supporting an ally and a democracy in a critical location is the only reason that matters.
That doesn’t matter much to this administration, but it’s not like they’re going to care about TSMC either.
You are so naive to think that US actually cares about democracy. Do you ever wonder why they invaded Iraq two times, but never really bothered to invade Cuba, which is in their backyard? Because Cuba has nothing of value, no natural resources, no valuable technologies. So the US tolerates communist regime in Cuba, because there's no money in invading it.
I will disregard "Bay of Pigs Invasion", since that wasn't really US military operation, but some small scale, CIA orchestrated coup.
"Actually caring about democracy" isn't the same as liberal hegemony, where countries go to war to spread democracy.
The US has a good reason to invade Cuba: it's tightly linked to the US's largest enemy. Which is the same reason it doesn't invade (overtly).
> Taiwan gets a significant ownership in a blue chip US company
Blue chip, Intel is not:
> "[...] known for its stability, consistent earnings, sound financials, and long-standing reputation." [0]
[0] https://www.investopedia.com/terms/b/bluechip.asp
15 years ago Intel was a bluechip company. Today it is circling the drain.
It seems like they're asking the wrong company to take a stake in Intel. It would make more sense to try to get companies like Apple & Nvidia to take stakes in Nvidia - US based companies that need the product that Intel can supply.
It’s a security deal. They are asking the Taiwan government to trade cutting edge semiconductor manufacturing for defense against invasion. You might call it a racket in other contexts. TSMC is already considered national security infrastructure under Taiwanese law.
Apple or Nvidia could easily buy Intel. I would be surprised if either had not looked at it seriously (for patents alone).
Apparently they don't need that kind of headache.
Honestly AMD makes the most sense, given they sold off the foundry stuff years ago, which is the part of the process Intel will be doing next.
The board brought on a chop shop guy, you don't do that when there is a future, and TSMC would be smart to wait Intel out and pick it up cheap. The USA wouldn't last a month without TSMC chips, Tim Apple wouldn't let that happen. There is no way this demand has any teeth
I don't think AMD has enough cash to do that kind of deal. Nvidia and/or Apple certainly do.
more sense for TSMC not for the US lol
This is just pure extortion and it's across the globe. It'll just drive more countries towards BRICS.
i mean what do you call the US domineering nearly the entire world's trade with its massive military for the past nearly 100 years?
True. At least Trump has exposed it.
I don't get it. Isn't it like forcing the foreign competitor into buying your only chicken that produces golden eggs. I really don't understand the logic behind this.
Well, to be fair, Intel stopped laying golden eggs years ago.
Just spitballing - maybe if TSMC had a 49% stake in Intel they'd be incentivised to transfer their chip-making technologies and techniques to Intel, to maximise the value of their (forced) investment?
Good point. They'd get whatever profit they make from the sale of tech to Intel, plus half of whatever benefit Intel receives.
Fortunately for TSMC, Intel really isn’t worth that much anymore. $50B doesn’t seem so bad, and maybe it could lead to a deep partnership and sharing of tech and factories.
Suppose this works: TSMC buys 49% of Intel and Intel remains competitive. Does the US really win? The US’s major fab owner ends up with close to or actual majority foreign ownership, actual competition in the market would be reduced, and there would probably be even more pressure for Intel to move operations out of the US or to consolidate such that it licensed TSMC IP instead of developing its own.
I'd tell the bully "no deal" if I don't get controlling interest, and thus full control of the board.
As much as I'd like to see bullying firmly rebuked, I'm not sure that approach would work here.
Because even if TSMC managed to get that initial deal, they'd still be at risk of Trump revisiting it.
Whatever he agrees to today, he'll do something different tomorrow. You can either tell him where to put it or not.
I'm not sure anyone but Intel is against that. Both US parties are most likely furious that the CHIPS act was a massive waste of money. TSMC would love to outright buy a massive US presence with valuable IP. The US desperately needs Intel to turn things around to remain a strategic advantage. Only Intel in their cesspool of hubris would want to keep the status quo of mediocrity.
But TSMC, please please please, get Intel out of Oregon. I'm so tired of that loser state holding back companies from reaching their true potential.
I'm kinda of shocked that chip & many tech companies play ball..
They are a required / no alternatives industry by so much of the USA, with limited alternatives. Is it really more cost-effective for each of these companies to spend hundreds of billions of dollars to avoid tariffs when they could easily pass on these costs because we have no alternatives?
>I'm kinda of shocked that chip & many tech companies play ball..
Have you heard of this story? https://www.eff.org/deeplinks/2007/10/qwest-ceo-nsa-punished...
The only telecom in America to resist turning on a domestic eavesdropping firehose tap for the government, was pounded to the edge of bankruptcy.
Intel and TSMC are both strategically important and favored-status corporations for the going concern of the United States, and large swaths of the federal appartatus are invested in their success, contracts, global projection, etc. That comes with a price. Naive to think they are independently operated companies.
> The only telecom in America to resist turning on a domestic eavesdropping firehose tap for the government, was pounded to the edge of bankruptcy.
How so? There was no mention of the government taking action against the company to cause the company to fail. If a company is failing without government contracts, that is on them and not the government.
Bernie died in prison because he didn't want to give them access to Worldcom so the story goes.
Bernie was released a month before dying. Don't ask me how I had this fact in the back of my head (I looked at Worldcom and Enron a few weeks ago for another HN story).
madoff died in custody at FMC Butner. he was not released before he died.
I think you are confusing Bernie Ebbers (Worldcom founder/CEO in Clinton Mississippi) with Bernie Madoff (big ponzy scam in NYC)? Yes, they are both named Bernie.
you are right, i did conflate the two. apologies.
I think people in power are pretty fond of non democratic systems, they like them. They make friends and get favors. Far easier than competing.
And what's the alternative for many of them? Lawsuits?
SCOTUS has quit doing their job. The checks and balances are out the window. There is no leadership / anyone in power at the national level when it comes to democracy in the US at this time.
SCOTUS was stuffed with political appointees to give the results the Republican party wanted. Overturning Roe v. Wade was just the start of that.
> when they could easily pass on these costs because we have no alternatives
The administration has made it clear they will take such actions personally.
The USA by and large figuratively controls the world. All of Europe is one step away from a protectorate and if Taiwan doesn't want to conquered by China they need the USA in the way.
If the USA ever sours on the relationship it means China will take Taiwan so they do whatever they need to do to appease the USA.
Honestly, this is a win-win for TSMC.
Intel isn't dead. They've made some bad choices and investments but they're still huge. They have $30 billion in gross profit per year on an utterly boring, non-hype based business model. Get rid of some dead weight, write off the bad investments, improve their foundry business and their value easily grows multiples of what it currently is.
On top of it already being a shrewd business deal, doing a favour for the US government also potentially buys protection for TSMC and Taiwan from China. Plus the immediate tariff relief.
Intel is not profitable. They have negative eps and negative free cash flow. The cash flows from existing products can't be considered in isolation. If their R+D and Capex investments stopped, the sum total of the existing+legacy cash flows wouldn't nearly cover Intel's substantial liabilities.
They also have 50 billion dollars in debt, and their cash flow situation has gotten so desperate that slices of future fab revenue have been pawned off to private equity, who now has a senior claim on the assets (as do the bondholders).
An equity stake and Intel is not something that a TSMC would want without coercion. It's just not a very attractive place to be an equity holder.
>Get rid of some dead weight, write off the bad investments, improve their foundry business and their value easily grows multiples of what it currently is.
As if it was that easy. The company has now been through multiple CEOs attempting to mix up these ideas in various ways. The last CEO tried to do a Hail Mary to improve the foundry business, but the balance sheet can't support it. Now the new CEO is essentially writing off those investments and putting them on the back burner. Considering that, getting rid of the dead weight will be difficult, considering the company itself is largely dead weight... The quality of their employees is not good, or at least not nearly at the level that needs to be (18A yields are alarmingly low, and that's the critical product that basically determines the company's future. 14a is already looking more and more distant despite it being the purported savior not even a year ago).
Realistically, their financial situation puts them right at the precipice of needing to shed the fabs, and/or permanently continue down the path of more Brookstone-like partnerships where they can spread the burden (which then caps the equity holder upside).
There is nothing "easy" about the current situation. Maybe without the 50 billion in debt, but nearly all of remedial paths are running into nasty balance sheet constraints. There's no more room to spend quarters rejiggering the thing.
> Intel is not profitable.
Did I say they were? Google gross versus net margin.
> If their R+D and Capex investments stopped, the sum total of the existing+legacy cash flows wouldn't nearly cover Intel's substantial liabilities.
You sure? https://www.intc.com/financial-info/balance-sheet
Current assets are $43 billion. Total assets are $192 billion. $30 billion yearly in gross profit. Debt is only $50 billion. They still hold 75% market share. Repeat, they still sell 3 times more chips than AMD.
Yes, their balance sheet isn't as good as some fabless competitors but if TSMC helps them with their 14a yield then it looks like a good investment.
Also, having TSMC on board will surely help with their fab business. Again, between the US government needing them to survive, TSMC on board, plus the fact they still do have a decent core business, I think Intel (and TSMC's investment) will be fine.
It's actually better than that. TSMC wouldn't help intel with their 14a node. They would kill it, fire all of Intel's foundry R&D, and just build TSMCs 14a node.
I mean, it's the same thing... So yes.
You euphemistically called it "help", but all you agreed to was a hostile takeover of a competitor only to gut said competitor. If a company genuinely thinks they are ahead, they don't have to do these petty tricks unless they want to nib a promising competitor in the bud while they are small and cheap. Intel is neither, nor is it a promising purchase. The only thing of value they possess is x86 IP.
The previous CEO had a plan. You could agree with the plan or disagree with it.
Current CEO has no plan, sabotaged the idea of last one and cries on twitter. Not a good outlook.
TSMC can just wait Trump out.
>> doing a favour for the US government also potentially buys protection for TSMC and Taiwan from China. Plus the immediate tariff relief.
They already built fabs in the US. The thing about protection money is the bully keeps asking for it again and again.
But the US government has proven to be unreliable in maintaining commitments -- even words on paper are meaningless as it doesn't seem to stop them from changing the deal later and demanding more ("I have change the terms of our agreement, pray I do not alter them further"), and then another request demanding more. Would TSMC be doing the government a favor and gaining protection, or are they being extorted? ("would sure be a shame if we doubled your tariffs again...")
Does it really matter? Does TSMC have a choice either way?
They’re a globally important company but they’re not ASML and they’re stuck between two superpowers and the threat of potential total war. They’ve had the misfortune of being sucked into geopolitical maelstrom and those tides are far too strong for any company to resist.
>> Does it really matter? Does TSMC have a choice either way?
Sure. Go home and make chips. Pass the tarrif costs on to customers. Would US customers have a choice?
EUV was developed with in a Cooperative Research and Development Agreement between the US Department of Energy, Intel, ASML, and so on - giving Congress control over who ASML sells the EUV technology to.
So yes, US companies do have a choice. They can lobby Congress to cut off TSMC from their main hardware and parts supplier entirely, crippling it altogether, except for their Arizona plant which is ripe for nationalization for natsec.
It’s not as simple as just buying an ASML machine and make chips. Otherwise Intel would have already done that.
For the cutting edge stuff TSMC is a monopoly.
TSMC certainly brings a lot to the table but if they were completely knocked out, it would just deprive the world of the top end of fab capacity for a while. On the other hand almost every fab in the world depends on ASML for parts and maintenance, even the old fabs on legacy nodes.
But most of those other fabs are in China! How does that help the US?
EU-based company can ignore USA same way USA ignores everyone else now.
Taiwan is too dependent on the USA ATM to make that choice. If they were to go it without the USA, the only choice would be to become an actual bonafide province of China, they aren't going to exist on their own. Almost everyone else outside of eastern Asia, however, can make a different choice.
I think there's reason for the EU to ensure that there's no semiconductor manufacturing monopoly.
So the EU offering something like nuclear weapons sharing à la that which Germany etc. would probably be reasonable if the US bullied Taiwan too hard. But I don't think it's happening, I think people want good relations with China.
If it were a win-win relative to their other options, they wouldn't have to be forced into it. They may have been able to make the best of it, but let's not pretend value is being created.
I don't know if any of that is true. Even if it's true, why TSMC?
Will Apple, AMD, and nVidia continue to trust TSMC if it owns half of Intel?
> Will Apple, AMD, and nVidia continue to trust TSMC if it owns half of Intel?
It doesn't matter because none of them have much choice. None of them own fabs and Samsung's capacity is significantly less than TSMC's. Plus Samsung also designs chips.
> Honestly, this is a win-win for TSMC.
Not sure about that. Buying Intel would make TSMC a direct competitor to most of its biggest customers which could incentivize said customers to look for alternative foundry.
After pretty much every company with a public profile threw money at Trump's inauguration fund, this doesn't surprise me at all.
> they could easily pass on these costs because we have no alternatives
Now imagine the same scenario, but one side is willing to destroy themselves as collateral if they don’t get the result they want.
I understand the push to build fabs in the US to avoid tariffs, as the US likely sees this as a strategic hedge for the global chip supply in case China disrupts Taiwan or Japan, or some other rare catastrophic event occurs.
Whether it is correct or not, Trump seems to view the US as a larger version of Mar-a-Lago, so he'll always feel he can charge a premium for access to its consumer base and market while offering discounts to those he sees as ingratiating themselves.
But it is supposed to be a free market that should reward efficiency and competence, not prop up companies that don't have their act together. If the goal is domestic chip production, funneling funds to TSMC's proven fab operations and to build more US fabs makes more sense than bailing out Intel, regardless of whether it is improper to demand such concessions at all.
TSMC tried to build fabs in US, it doesn’t work, turns out you can’t hire top PhDs and pay them 30k and tell them it’s a lot of money
doesn't tsmc have a 4nm plant in arizona that is cranking out chips today?
No? Show me a GPU, or a CPU, or anything with a Made in America label.
You got some wildly incomplete facts.
https://fortune.com/2023/06/03/tsmc-arizona-plant-jobs-salar...
>New engineering grads with a master’s degree earn on average $65,700 a year, while general full-time staff earn $32,800—compared to Taiwan’s average annual income of $21,700.
$32.8k for full time salaries in Taiwan, which is more than the average. And this is _general_ staff. Not engineering staff my dude.
>Another challenge is compensation. TSMC pays up to $160,000 annually “for Ph.D.s with some good experience,” says an Arizona-based CEO of a semiconductor recruitment firm hiring for TSMC. That same Ph.D. can earn some $30,000 more at Intel, according to Payscale, a website that tracks company salaries.
And that's the real number for PhDs in the US.
Quite frankly, though, they probably have less competition with Intel now that it's collasping ;)
>TSMC’s American rivals, meanwhile, are defending against its recruiting onslaught. The recruitment firm CEO says candidates have gotten “counter-offers like we’ve never seen. Intel is… giving [people] $10,000 to $20,000 to stick around. We’ve lost people that way.”
AND, if TSMC was really paying so low, their competition wouldn't be falling over themselves to pay retention bonuses.
(I also think they are probably underpaid in their current jobs and don't know it)
My friends working in fabrication - experienced, competent engineers with years of work history in Intel and Micron factories - got laughably insultingly low offers from TSMC. Like, 50k, no PTO, weak or no benefits. They literally laughed the offers away and got cushy software jobs with minimal retraining.
This was a few years back, maybe TSMC realized you can't pay Taiwan rates in the US.
They obviously changed things given the article lol
I've learned not to trust articles' accuracy on aspects not corporations that are difficult to verify in public data.
Once I was reading an article saying the company I worked for didn't operate its own datacenters... while I was setting up new hardware in one of our several datacenters.
Seems kind of fascistic and lacking in the free trade department to force a purchase to receive selective exceptions. This is picking winners and losers by extortion.
Intel only up 4%. Seems unlikely.
It seems like we're forcing the rest of the world to print dollars.
A swiss news paper wrote something along "so far the main effects seem to be the rising prices of Swiss goods in America, not really a falling market"
He is threating Switzerland with 250% tariffs on meds while his people still suffer under horrendous health care prices. That man is beyond crazy
For drugs that are monopolies, tariffs actually don't impact the end price and hit the producer. In the short term, for drugs that are already on the market. In the long run, it reduces incentives to develop drugs.
Tariffs are a tax on consumers for commodities but not for monopoly products.
So the assumption is they take the hit of 250% and just keep providing the US with these unique drugs when the US is "only" at max 20% of the total market? Afaik even less the more specialized drugs get.
Edit:// it's not just me. Swiss media does barely seem to understand anything anymore either
A monopolists can set prices however they want (in contrast to competitive supplier of commodities where there's a market price). They want to maximize profits and if marginal cost of sale is negligible (as is the case for patented drugs) the optimal price is determined by the demand curve. The demand curve depends on the price the buyer sees including tariffs. So the price post tariff is the same as the price without tariff. The monopolist absorbs the tariff, customer pays the same.
Yes, monopolist will still want to sell because they still make profit. They don't take a hit of 250%, their profits are just reduced by ~2.5x.
US has famously high drug prices due so cutting edge pharma makes much of its profits there.
This is all standard 101 International Economics, Paul Krugman has written the standard textbook for it, it's a fun read.
Thanks for the insights! Obviously I am economy noob.
> US has famously high drug prices due so cutting edge pharma makes much of its profits there
That's still weird to me. Switzerland has a cutting edge pharma market too and health care is affordable.
Too many reasons for a reply here, but overall the common theme is lack of regulation giving pharma more power to play on their patent-derived monopolies.
As for Switzerland, it's a small country with an economic model that doesn't scale/generalize. Even in Switzerland there's constant discussion about health care (insurance) being too expensive - though the biggest driver is wages not drug prices.
I am not sure if you read other news but I am not aware of constant discussions when our insurance is comparingly cheaper than for example Austria but we earn 3 times as much.
Its nearly a guarantee TSMC was going to be exempt. The dismal performance of their AZ location and Samsung's TX location shows how the US wouldn't even be anywhere near 20% domestic manufacture by 2035. Capital≠Competency. The 70k staffing shortage, difference in culture is the real issue here. This tariff would have turned into a kamikaze maneuver had it not been for the carveouts.
I was stunned when it was announced. I mean having contradicting tariffs and goals is one thing, but semis?! Wonder if this will finally get Intel their first Intl. buyer for their semis.
Unprecedented rapacity by the United States - not only forced tech transfer, and then having to pay for the privilege of being robbed; the hegemon is consuming its vassals, as it withdraws from its commitments.
Well China has been forcing tech transfer for 30 years now.
Look at Intel's history. Concentration of power (monopoly) generally leads to corruption/abuse and stifled innovation. It's bad even for the monopolist.
The second China becomes powerful enough to throw their military around like the US is when I start supporting tech transfers the other way. A more distributed power structure is much better for overall progress.
> The second China becomes powerful enough to throw their military around like the US
This would be late timing.
Go look up "world's happiest countries 2025". There are lots of places that are absolutely thriving despite not having the biggest guns (and perhaps because of it).
China is on a path to having the biggest guns anyways (I totally expect them to pass the USA in military power in my lifetime).
Unsurprisingly, this correlates with antidepressant usage.
And China is becoming increasingly isolated from the rest of the Western world. I'm amazed that the US is following suit.
why you acting like this is bad thing????
Because nobody can explain why its a good thing????
Trade deficits are bad. See Greece a while back.
That sounds a lot like "Well our enemy doesnt follow the Geneva Conventions, so why should we?"
Ask yourself what the benefit is of having the US as a diplomatic partner if you can get the same deal from China but with a more stable and predictable leadership.
not remotely equivalent
This feels like the Foxconn deal from his first term.
By corporate practices this is not a good thing. Companies buy companies if they are complementary to them (which Intel is not to TSMC) or competitors in order to extinguish them (which nobody wants for Intel). Government enforcement to buying a company leads to mutual hurting. So no option is left than to do nothing.
This whole economy by corruption and coercion is not going to work out.
The article pretty much says it right in the opening section
> investing a further $400 billion in the US alongside buying a stake in Intel seems improbable from a purely financial standpoint
TSMC's entire assets are ~$200,000,000,000 [1] (cash, inventory, accounts receivable, land, buildings and equipment.)
Buying 49% of Intel ... maybe. Intel's outstanding Market Cap is current ~$88,600,000,000. (4,377,000,000 outstanding shares [2] @ 20.26 8/5/25 midday price [3]). Double TSMC's entire assets is a bit extreme.
Notably, Intel's valuation also seems kind of nonsense. They made $13B in revenue last quarter. 2024 yearly was $53B ... on a market cap of $88B? Intel's been a mess lately, yet their valuation's also kind of a mess. If they ever stop bleeding money on operating profit and net income they won't look that bad.
[1] https://en.wikipedia.org/wiki/TSMC
[2] https://www.nasdaq.com/market-activity/stocks/intc/instituti...
[3] https://www.nasdaq.com/market-activity/stocks/intc
They could do the China[1] / EU[2] strategy of announcing they'll do it, but never following through with it. When your opponent has the attention span of a drunken gnat, it's a surprisingly good strategy.
[1] https://archive.ph/sAFWP
[2] https://paulkrugman.substack.com/p/fossil-fool
What part of any plan they have had tells you they are likely to stop losing money any time soon? They are basically selling for asset price right now...because the market doesn't believe they are worth more than their assets.
No plan, but wouldn’t be the first time a juggernaut is turned around.
Wouldn't be the first time they became obsolete either...and I think even with the US governments help they are too far down the drain to come back.
Why would they buy exactly 49% and not 51% of Intel? If these extra 2% are not available, why buy 49% then and not just 2-5%?
They don’t want a successful foreign company to have a controlling interest in their failing domestic company
Is your "they" the same as the parent's "they"? Seems like you're talking about different parties.
They want to ensure that TSMC doesn't have a controlling stake.
The remaining 51% would be highly fractured unless it was like the US government on the otherside. One of the publicly traded companies I worked at effectively got taken over with <20% of regular shares by an activist billionaire.
The 51% would be controlled by the few people from funds, who live in USA - and who are easy to "influence"
Ya, they would have to make their stake non-voting regardless, then what would be the point? I don't think Trump thought this through.
That money will be provided via a loan, from the US Government, at a reasonable interest rate. USG doesn't lose money, TSMC gets to expand into all of Intels fabs (when they raise the money to buy a controlling interest in INTC down the line.)
Or the entire thing can be done by a stock swap, with whoever diluting themselves however amount is necessary, etc.
They are $50bn in debt.
I’m convinced that this is all what it looks like to live through the end of an empire (or whatever term you’d like).
I think our lives are short enough that it can be easy to perceive something like America as “always was, always will be” and the rest is just trivia you learn in history class.
The collapse of an empire is correct. USA is absolutely an empire, and we're clearly seeing unprecedented contractions and spasms of our government as it ineffectually attempts to govern while doing everything it can to foment civil agitation.
> I’m convinced that this is all what it looks like to live through the end of an empire (or whatever term you’d like).
It feels to me like it's more like the beginning of an empire, in the sense of existing under an emperor.
> I think our lives are short enough that it can be easy to perceive something like America as “always was, always will be” and the rest is just trivia you learn in history class.
I think it very interesting that one of the things the USA is going to have to grapple with, in the middle of the most contentious presidency in its history, is the semiquincentennial of independence itself.
The bicentennial of independence in 1976 was I think largely an uncontentious thing even though the Vietnam conflict had ended only a couple of years beforehand and the presidency was in the hands of a guy who had taken over the job from, and pardoned, a crook who was forced to resign. Internationally people were pretty kind and generous to the USA.
I don't think anyone, anywhere on the planet, is prepared diplomatically for how it will play out this time. Next year is going to be a heck of a year.
The US president has been an emperor in all but title for generations at least.
I think this will have been news to Biden and especially to Obama, who didn't even get the deference about the new suit.
If you think Obama wasn't overseeing an empire, I don't know what to tell you. Maybe you should ask the people of Pakistan, Yemen, Somalia, Afghanistan, Iraq and Libya about the US drone strikes there.
Oh, that isn't what I mean, and I am willing to accept your view. (And I was joking a bit anyway)
What I mean about the beginning of an empire is, as I said -- the beginning of a true individual, not simply unitary, emperor. That the executive is transforming into l'état, c'est moi, which no US president has had the luxury of ever before, because Congress wouldn't ever have handed over the influence and authority they had.
This could still be turned around, with some luck and effort. But it won't happen if the voters don't get out of frog-being-slowly-boiled mode, clinging to normalcy bias.
So in the end your assessment is probably correct. It's probably going to be a long, slow decline though.
You wouldn’t have said that before Trump took office, so it seems to me that it’s one idiot causing all of the problems and not the kind of slow decline that happens over a long time span when an empire falls. What Trump is, is not compatible with who we are as a country and I’m confident he is going to bring about his own undoing when the economy really starts falling apart.
Actually I would argue that America has been slowly in decline for a long time now. And the inflection point is when there’s critical mass of that rot that someone like Trump can be elected. How embarrassing for all Americans that it got this bad, but even worse: it being this bad will greatly speed up the process.
Been working for a long time just like that though.
The amount matters a great deal IMO.
Visibility is the difference.
It happened before, and perhaps even worse (more competent people were corrupt).
Now, people are just making it public.
The existence of any corruption really has nothing to do with the amount. The amount matters.
Not all corruption is visible or known.
If suddenly corruption is done in the open, you see it more, and think it may be because the total amount is greater, but it is only more visible.
We don't know how much historical corruption was invisible, thus it is hard to accurately say there is more.
Banana Republic shit.
Just last week, the director of the Bureau of Labor Statistics was fired because the jobs numbers didn't look good and that upset the person in charge.
I've heard this described as the coach firing the scoreboard after they lost the game.
This isn't corruption or coercion. This is a deal. These are terms being offered. They can say no, or counter. But these terms benefit all parties-- TSMC can eventually buy out intel, get lots of top end fabs, bring their superior processes to those fabs and meet the huge demand in AI chips-- that they currently can't grow fast enough to cover. ASML machines take years to build... a better TSMC process on existing ASML machines in Intel fabs is an easy %30 win for the entire world.
Plus, china kept at bay, peace increased, intel's bad management gets to bail out saving face, TSMC gets rewarded for their hard work, Trump gets a win, Intel's employees get better management, and get rich from their stock options winning hugely....
Capitalism is where everyone wins like this.
Even china, because china loses if it goes to war, but china feels it has to go to war.
I don't see how it can't work at least short term, when the US is by a long margin the world leading military and economic power.
Why else has the US been overspending on military for decades and planting military bases and nuclear submarines all over the world, to become the world hegemony, if not to bully everyone in doing its bidding when push comes to shove?
I'm not defending the actions of the US, I'm just asking what are the other countries gonna do about it? Ally with Cuba, China, Iran and Russia to fight the US? Unlikely.
UK, Canada, Australia, New Zeeland are 5 eyes members and therefore lapdogs of the US, and the EU as much as they dislike the US due to Trump, has a laundry list of urgent domestic issues like Russia, no cheap energy, no high growth industry like tech, ageing population, economic stagnation or even decline, collapsing welfare and pension system, illegal immigration leading to a rise right wing extremism leading to crackdowns on freedom of speech and censorship leading to further social and political turmoil. So how is the EU gonna retaliate when they can't even keep themselves together?
What can they do now, when the US holds all the cards? Their only hope can be that the US collapses from internal issues, just like the Roman empire, but until then, they literally have no screws to turn on the US and just like the EU, Switzerland, etc, are forced to accept the terms of the US or have their already fragile economies suffer even more.
> I don't see how it can't work at least short term, when the US is by a long margin the world military and economic power.
The 90s were ~30 years ago. American economic and military capacity ain't what they used to be, and alienating your allies and friends is starting to look like a poor strategy.
>The 90s were ~30 years ago. American economic and military capacity ain't what they used to be
You're totally wrong about this when you look at the numbers. EU's economy was on par with the US about 20 years ago. Now it's only half the size of the US.
USA spends more in their military than the rest of the world combined. Also the only country which used nuclear weapons of mass destruction. You must fear them.
The US spends more on everything, those numbers need to be cost adjusted for "cost of a rifle for America v cost of a rifle for China", but never are.
When all your military spending can't help you win against a third-world country (USA in Afghanistan) or a single country 1/3 your size (Russia in Ukraine), it really makes you wonder if all that spending is justified to uphold one big bluff.
We aren't pointing "all our military spending" against Russia in Ukraine. Not by a long shot (no pun intended).
Of course not. But I think it's also true to say if the US hasn't been willing or able to effectively use its military power at the margin to stop a historic enemy from annexing its neighbours with impunity, your average regional power doesn't have to worry about the US using its military power to dominate world trade.
Entire discussion seems to be ignoring the Russian nuclear weapons, so the war has to be conducted entirely with Ukranian-flagged troops.
Why? Would the presence of peace western troops make a Nuclear strike by Russia more likely?
See https://news.ycombinator.com/item?id=44822385
"Peacekeepers" is obviously meaningless when there is no peace to keep, so the question is what happens when NATO troops attack Russian troops directly.
Nothing will change in the US if Ukraine falls tomorrow.
People love to cry foul when the US flexes it's might... then cry foul when the US takes a back seat... literally cry foul no matter what the US does.
If Ukraine is so important to the world order, why has Europe (you know, Ukraine's actual neighbors) not stepped up with their full military power? Why is Europe not threatening troops, missiles, aircraft, tanks, etc... even nuclear obliteration if Putin doesn't yield? Why is it the US has to swoop in, from half a world away, and save the day (again, and again, and again...)?
The US is not currently willing to send our citizens to die in Ukraine. Maybe Europeans should?
> People love to cry foul when the US flexes it's might... then cry foul when the US takes a back seat... literally cry foul no matter what the US does.
There's a difference between the US invading Iraq and US aiding a country being invaded.
> US aiding a country being invaded
Why can't the Germans send troops into Ukraine? Or the Brits (for all their grandstanding and bluster)?
Why must it be the US?
If "everyone" thinks Putin isn't going to stop with Ukraine, then it would seem Europe has an existential crisis to deal with - not the US, thousands of miles away...
Why the US and not Germany or UK?
Two reasons:
1. Because whichever country does go in, it gives everyone else in NATO an excuse to do nothing in response to Russia subsequently going to full war with whoever it was that went in. Strategic vs tactical response in local political sphere, short-term tactical benefit of using such an excuse comes at long term strategic cost.
2. Right now, each individual European power is in a state of "Oh no, Russia's probably 3-5 years away from attacking us if Ukraine falls, and it will take us 5-8 years to be ready to defend ourselves". The UK, for example, has a 136k active and 32k reserve personnel in total, while Ukraine forces have suffered ~400k wounded and ~50-100k fatalities.
Both points become "we can only intervene directly as a joint act from multiple nations".
That said, if the USA were to leave NATO, I wouldn't be overly surprised if rest of NATO may issue a joint declaration that Ukraine is now under their combined protection, nor would I be overly surprised by an alternative outcome such as NATO being functionally replaced with Article 42 of the Treaty on European Union: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex%3A...
And also, much of Europe is, in fact, sending aid (and arms) to Ukraine. All the other stuff is about troops on the ground.
There's plenty of threats by Putin to use first strike nuclear weapons if NATO troops directly engage Russian troops. So the current approach is indirect: British "military advisers" train Ukranians in the use of British Javelin missiles, but don't pull the trigger themselves.
Even a non-nuclear direct conventional war would get very messy very quickly. NATO would have to seize Kaliningrad and Belarus, start interning Russian nationals, rush forces to hold the Baltic states, and so on. It's not complicated to say "this will be very expensive and deadly, so we're not going to do it unless absolutely forced to".
European states are now re-arming (the irony of fate is that it's now US policy for Germany and Japan to re-arm), but that is going to take a while.
Just to state a fact.
Article 5 of NATO (an attack on one is an attack on all) has only been invoked once, by the US. So why did NATO members send their militaries to Afghanistan?
The real reason is that most conflicts never happen. Or are resolved before ending in a full war. Either the US or a European NATO country sending in troops would muddy the conflict so much that the risk of escalation is huge.
You are taking a short sighted view on what it means to be a super power.
If Putin wins in Ukraine, it will show everyone that the US is incapable to hold even a weak enemy such as Russia to account. It is irrelvant that you frame it as a choice rather than a failure.
Europe has been doing more than the US in absolute and relative terms to prop up Ukraine but it hasn't been enough to help Ukraine win. As a European, I would want our governments to put soldiers down and end the war, but Russia has been successful in the information war to make too many citizens afraid to enter with troops.
The US hasn't been saving the day for anyone without ulterior motives for a long time (ever?). You make it seem like it were generous moves to counter mostly Russia or e.g. ensure access to middle eastern oil.
The US has never spend money on its allies which it didn't believe has a large return. So the current Republican administration's view to reduce engagement is actually hurting themselves. Classic lose-lose.
> The US is not currently willing to send our citizens to die in Ukraine
The US is currently not wanting Ukraine to win for a single reason - it’s personal to Trump. So much has happened that we’ve collectively forgotten that it was Zelensky said “No” to Trump on the phone when wanting to find any dirt on Joe Biden helping Hunter in business deals.
> The US is currently not wanting Ukraine to win for a single reason - it’s personal to Trump
That totally explains why Biden kept slow-walking support packages...
> Nothing will change in the US if Ukraine falls tomorrow.
It certainly will when Putin moves on to invading Poland or Finland. The whole point of holding the line at Ukraine is because everyone believes Putin won’t stop there.
After the unexpected difficulty of the Ukraine war, how likely is it that they would try to extend themselves even further, against stronger countries than Ukraine?
More likely than if they lose in Ukraine, that's for sure. Because the lesson they will have learned is that invading countries is a winning strategy. They were deluded enough to invade Ukraine, they are deluded enough to invade Poland.
"Putin is too sensible to invade Ukraine" was the argument people were making the day before he did. My guess is these are the same people who now say "Putin would never invade Poland".
It would not be a terrible loss for the world if Russia invades Poland. Been there, too many consonants in their names and the food is too sweet.
Never been to Finland so no opinion on that.
The Bush administration was looking to "win" in the Afghanistan by doing nation building, which was never going to work, and certainly wasn't going to be accomplished by military means. Obama and Trump both chose to kick the can the road, to not pay the political cost for "losing", Biden ended the conflict, and paid the political price.
But if the US had a different objectives, every human settlement in Afghanistan could have have been radioactive ash by September 12, 2001. Or, more realistically, the US could have gone in, killed all (for some value of all) the local elites as a warning to leaders elsewhere about the costs of harboring terrorists, and then immediately left the country in the same sort of chaos that they eventually did a couple of decades later. Kabul delenda est was always accomplishable.
The only people who should be ashamed of the their performance in Ukraine are the Russians, and the Europeans, for failing to be able deter or respond to the Russia on their own despite having an economy five times the size.
US interests are perfectly well served by seeing the Russian military mauled for a generation at the cost of aid, much of it material that was going to be decommissioned anyway, that costs roughly what Americans spend on golf in a given year (Once you throw in the costs of drinks on the 19th hole.)
Anyway, US arms sales are up since the start of the conflict, Russian sales have cratered.
I mean we rolled over Afghanistan the problem is fighting a war "humanely". Hard to accomplish anything with both hands tied behind your back. Just like in Vietnam the USA's ability to wage war is only limited by what it's local population thinks is "fair".
Winning is different from taking over.. Russia wants to rule over Ukraine, not destroy it.
US was all into destroying Afghanistan and Iraq. They had no intention of being there long term.
I'll nitpick here and say that Russia's plan was more likely to topple the government and put a puppet in place and then leave, but they botched that.
> Russia wants to rule over Ukraine, not destroy it.
Can’t it be both? It’s hard to argue they aren’t trying to destroy it. It has been attempted in the past during the Holodomor.
https://en.m.wikipedia.org/wiki/Holodomor
The context of post-civil war stalinism and food/industrial policy was a little different from modern Russian empire-building.
Russia's end goal here is a cultural genocide.
Russia destroys its colonies. It wants to destroy ukraine. And it wants cultural genocide.
China seems to be working on catching up, and if you remove all of your soft power maybe they look more attractive?
Absolutely. Everything the OP mentions as a reason to continue trading with the US is also a reason for Europe to trade more with China. Historically the argument for not doing that is "look at their very different values and how they bully and threaten their neighbours, and remember that if you do business there their government will happily crush you with its arbitrary power as soon as you step out of line and even at the import/export any trade deals they do make will be them openly trying to screw you" The US isn't exactly in a strong position to continue making those arguments about why the world's other superpower is different with a straight face.
The US doesn't need to be cut out of world trade altogether (it won't be obviously) to lose a lot at the margin, with the chief beneficiaries ironically being the country the current US administration most hate...
More than what? Europe trades a tremendous amount with China in the status quo. The argument you mentioned is real, but the EU never subscribed to it in the first place; they've consistently stated (e.g. https://ec.europa.eu/commission/presscorner/detail/en/STATEM...) that trade with China is very important and they have no interest in decoupling, although they'd like to lower the trade deficit.
Well yes, and so does the US. But Europe has certain significant restrictions on trade with China in sensitive areas, and levies its common external tariff on Chinese imports. China would love those restrictions to be removed and to get a broad trade deal. And other countries that consider themselves broadly aligned with the West have considerably less decision-making inertia than the EU
I don't think China would love to get a broad trade deal. Analysts in both Europe and the US generally agree that the Chinese government cultivates unbalanced trade as a matter of policy. (Indeed, one of the things that's supposed to happen as part of the US-EU "trade deal" is joint action on metals to counteract persistent Chinese overcapacity.)
A broad trade deal would be unbalanced in China's favour; they manufacture more and at lower cost. But the US isn't exactly selling the message of being the better partner right now.
Neither of them are acting like good partners right now, thus the trade disputes. Smart money has to be on the US getting a less crazy leader sooner than China stops pursuing its long-standing mercantilist ideas.
Maybe I'm not understanding what you mean by a broad trade deal? As of 2023, a large majority of imports from the US and close to a majority of imports from China were tariff-free. (https://ec.europa.eu/eurostat/statistics-explained/index.php...) The remainder are on goods that the EU doesn't want entirely free trade in for some reason or another. I could definitely imagine a scenario where China follows in Trump's footsteps and bullies the EU into pushing their tariff-free percentage higher, but I wouldn't call that broad and wouldn't expect it to produce radical shifts in the import-export activity of EU businesses.
Europe is not going to trade more with China, if anything, they want to trade less with China, if you look at the recent events.
- Europe signing trade deal with US
- China: We can’t afford for Russia to lose Ukraine war https://www.yahoo.com/news/russia-cannot-lose-war-ukraine-09.... In other words, China is attacking Europe via Russia.
- China is in a great depression. Their only economic engine is export, and Europe is steadily putting up tariff walls.
Oh and TSMC is on an island they claim is their own. Great: an Intel that has TSMC as its largest single shareholder is essentially wholly under the thumb of the State Department.
> Great: an Intel that has TSMC as its largest single shareholder is essentially wholly under the thumb of the State Department.
They already are. The US defence industry buys from them no matter what. Which is why the US needs to ensure their survival. The concern isn't that Intel survives or not (the US would prop them up no matter what), but that they also remain on the cutting edge and the US doesn't lose out if, say, Taiwan falls to China.
No magic that keeps your businesses efficient or running if the government is picking winners and using tariffs. Quite the opposite.
The Soviet Union overspent on military, so much that lots of its military equipment is still present today: https://en.wikipedia.org/wiki/List_of_main_battle_tanks_by_c...
If anything, it shows the opposite of what you are saying.
It will not work out over the long run. This is corruption; it breeds corruption, and corruption creates victims. Victims don't put up with it forever and as the old cold case appeal spiel goes, "alliances shift over time".
More prosaically, in the short term: TSMC are now effectively compelled to acquire Intel entirely or at least a controlling share, right?
Unless Trump's shakedown requires them to own 49% but then bans them from owning more than 50%, which would be the end of the USA as any sort of free market -- and I concede that is possible, because the USA now has a leader who acts more and more like an autocrat -- aren't TSMC essentially compelled by their own interests to find the just-greater-than 1% somewhere?
If you're blackmailing me into owning almost all of something but not getting control of what I owned, I think the logical next step is to forcibly gain control, yes? Because it turns the tables.
Not least because acquiescing even to buying 49% paints a target on my back.
Trump is not saving Intel: he is guaranteeing it is going to get broken up and sold off. He is destroying it. (More to the point he is immediately tying its existence to the success or failure of his own Asia-facing foreign policy, which means he is effectively asserting control over it)
TSMC is not going to get over the 50% threshold because it has no free will in this whole matter, as the very existence of Taiwan, and hence of TSMC, depends on the political will of the US.
Otherwise I fully agree with you, this will definitely not work out in the long run, but who cares about the long run anymore in this day and age?
But they have to try, right? Otherwise as you say, they are essentially operating under Rubio and Trump's control as a tool of the State Department.
The other important thing about this is that it dirties Intel almost immediately with presidential cheeto dust. So the value is going to fall over the long term, and this isn't the last sell-off they will have to do. Can you stop TSMC or a stalking horse for TSMC buying up parts of the rest?
Trump has created a powerful victim here.
Why would China annexing Taiwan have any direct effect on TSMC ?
I'd imagine they would be happy to have TSMC still selling to NVidia, Apple and AMD, and therefore a powerful lever in case of future US export controls/etc.
because even without deliberate sabotage a war in Taiwan would shut TSMC down for at least a decade. Changing the toilet paper supplier can drop yield by 20% until they sort it out. How do you think a warzone will affect it?
TSMC built a fab in Arizona that in 2 years was up and running delivering chips to Apple, so it doesn't take that long ...
Obviously a protracted or nasty war would have a severe impact, but it's hard to see why China would want to harm TSMC, even if worse case for US they stopped them from exporting.
you're assuming way less action from the US than there would actually be. it's not about the exports, it's about the supply chain to supply a fab. they need euv machines, wafers, thousands of specifically sourced chemicals etc.
it's not about what China wants, it's just not feasible to operate a fab in a warzone
It won't work out because the people in charge are the dumbest motherfuckers imaginable. They are utterly convinced that every one of their stupid ideas is brilliant, that they know everything, and that the way forward is to liquidate anyone who has the audacity to say 'no' or 'you're wrong' to them.
That's not the roadmap to good management of anything, as literally anyone who has ever worked a job will tell you. How people can see an amalgamation of all the traits they despise in a peer or leader that they actually have to interact with, and go 'oh yeah this guy should be running the entire country, this will end well' is mindblowing.
The empire can run on fumes and momentum... for a while. No company or country is so exceptional that it can survive enough mismanagement, eventually you burn through the furniture, and piss away whatever lead or competency you had.
I'm not sure they're convinced that every idea is brilliant. They're convinced that they have to convince everyone else that every idea is brilliant, because if they don't, everyone else will wake up and realize that many of their ideas are in fact not all that bright.
I don't think at this point it's safe to say that they are actually playing 3-dimensional chess. There is plenty of evidence that indicates that they are stupid enough to believe their own bullshit.
It seems like the tariffs are at least one-dimensional chess. The supposed rationale for the numbers was widely ridiculed, but now it’s clear that the numbers didn’t matter as long as they’re large. The tariffs have no rational basis as tariffs, they’re just a convenient stick for extortionate demands like this one.
The US margin on economic power isn't all that great, by GDP/PPP it's a long way behind China.
Though from the POV of economic coercion, the question is probably more like "what's the USA's import/export market like relative to all my markets including domestic?", which is going to vary wildly by industry.
> Ally with China, Iran and Russia to fight the US?
Replace Iran with the EU, and yes, some or all of them.
> EU as much as they dislike the US, has a laundry list of urgent domestic issues like Russia,
Urgent, but affordable.
> no cheap energy, no tech industry,
Energy isn't meaningfully worse than anyone else, lots of tech but it's mostly local rather than global in scale
> ageing population, economic stagnation or even decline,
Like everyone else, including the USA
> collapsing welfare system
News to me. Also: Wasn't the USA's supposed to collapsing since Obama took power?
But also, not a unified welfare system over all member nations of the EU.
> illegal immigration leading to a rise right wing extremism leading to crackdowns on freedom of speech and censorship.
Is it, or is that a narrative? And specifically, is it doing this worse than the USA today?
US is a lot richer than China. GDP/PPP does not count the number of citizens.
If per capita was what mattered, the US would be kowtowing to each of Luxembourg, Singapore, and Ireland. The US does not, because "per capita" isn't as important as "per government".
The mean wealth/income per person in the USA is indeed higher than China.
So what?
> What can they do now, when the US holds all the cards?
Negotiate and follow through in bad faith, because there's no upside to acting in good faith when the opposing party is pursuing a lose-lose agenda.
This is how China has been operating since forever. They don't seem to be doing too badly.
This is one of those situations where much like manufacturing jobs in the us ... that's not what I want. I don't think most people want that.
I don't think becoming China would be a success.
China forced 49-51 JVs. But Intel is a public company, not a JV.
Who knew "Running America like a business" had so much in common with the Chinese Communist Party? Banning books, blocking access to websites and apps, protectionist tariffs to support local business and now forcing foreign competitors into joint ventures with failing local companies.
The through line is authoritarianism. Whether it’s Chinese communist authoritarians or American fascist authoritarians, the result is corruption.
Are they? But Silicon Valley is in the USA and not China. I would imagine the legal and business environment has something to do with that.
The economy of "corruption" and "coercion" is Neoliberal Economics 101. Send your regards to pseudo economic theory from the Chicago School of Economics (ie, Milton Friedman); and to Reaganomics/trickle down economics.
Both Friedman[0] and Reagan[1] were strongly opposed to tariffs and most forms of government intervention in the economy. Hard to imagine either of them supporting the current administration's policies.
[0] https://www.youtube.com/watch?v=zv5SiQpG6sg
[1] https://www.youtube.com/watch?v=gFMyB8WMuDU
Literally the opposite of reality. Not sure how it’s possible to get this so backwards
It has historically worked pretty well, for several centuries at a time.
Are you saying there’s something different this time ?
I don't know what you're thinking of.
Well, I am British and have studied a tiny bit of my own country's history... so I do.
But consider who in the world really loves the British. You don't need much time to make a list. Or even a paper and pen.
The main difference between the British Empire and the American Empire is that the American Empire is being led by a man who believes tariffs are a tax on foreign countries and retail prices can be cut by more than 100% and remain positive.
> and retail prices can be cut by more than 100% and remain positive.
I've missed this story. Can you elaborate?
It's not much of anything - Trump said he would get pharma prices down 500 percent or such.
He said it more than once on more than one occasion though. Which, as with all these things, means either:
- this is his wonky understanding (and he is pretty famously innumerate)
- he's saying it as a power game despite the pushback because people around him feel they have to smile, agree and retcon stuff to make it believable
Or indeed both.
I do kinda expect he saw the number on a paper and has latched onto it, personally. I doubt he can interpret tables or charts.
The most charitable explanation is that -- because as a malignant narcissist his grasp of past, present and future is really kind of broken -- he's talking about reversing hypothetical gains, and because the numbers sound big he doesn't care that it doesn't make any sense to the listener, and his team will twist themselves into pretzels to make it true anyway.
(I haven't yet heard them make the claim that he means reversing gains, but I would expect them to. Heck if it was my job to make his Truth Social messages make sense, that is what I would say.)
But honestly his grasp of fractions and percentages has long been known to be worse than early era ChatGPT.
The most worrying aspect of the Trump era for the markets should be that he treats numbers as entirely flexible according to his mood, when the market needs them to at least be consistent.
But then they knew this before he was elected the first time; he is famous for admitting he assesses the value of future business at any time based in part on how he feels about it (which is reminiscent of the way Musk assesses future valuations, future delivery dates for full-self-driving, future sales of robots etc.)
So it's not a political thing at all. He hasn't always been a Republican but he has always been like this with numbers, and anyone who has ever subjected his words to any kind of scrutiny should know it.
How is that Tiktok forced sale going though?
The longer Trump creates a legal black hole carve-out for Tiktok, the less anyone will want to buy it. Because he is and this action is transparently corrupt, and it taints the buyer.
And that is true of the participants of any of these forced transfers; they paint targets on their back for future manipulation by the Trump executive. (Which increasingly feels like it should be described as a regime)
Something working well* (at least for well-connected people, relative to the general populace) when world GDP was two orders of magnitude lower does not mean it works well (for the general populace) today.
[flagged]
Post the rest of the quote
You were downvoted, but you were right in pointing out that the quote was taken out of context. Here's the full context:
"Nixon should be told," Kissinger said, "that it is probably an objective of [Clark M. Clifford, the Secretary of Defense] to depose [Nguyen Van Thieu, the President of South Vietnam] before Nixon is inaugurated. Word should be gotten to Nixon that if Thieu meets the same fate as [Ngo Dinh Diem, a former President of South Vietnam whom the U.S. initially supported, but who was later murdered in a CIA-backed military coup], the word will go out to the nations of the world that it may be dangerous to be America's enemy, but to be America's friend is fatal."
Kissinger was motivating why the U.S. should continue to support Nguyen Van Thieu, the dictator of South Vietnam; but today his words are frequently taken out of context to suggest a self-aware take of U.S. foreign policy.
Yes let’s discuss Kissinger’s intentions. That’s so much easier than discussing shitty US foreign policy.
"If we pay the Dane, certainly he won't ever come back for more Danegeld."
Makes me think of the Dollar Milkshake Theory. Taiwan is dependent on the US economy, so the US can and will use it's economy like a spending account.
If US steps in to buy a troubled asset such as Intel after failing to convince TSMC to buy, this country is cooked.
Did we learn _nothing_ from the 2008 subprime mortgage crisis? Let them fail.
I think 2008 showed ... how it works.
The unfortunate part is that the GOP has now repealed whatever protections were put in place on banks after that.
when I read "how it works" I assume you mean that it was a success? bailing out GM in the way they did pushed their novel vehicle platform technologies to fall to the wayside and for them to refocus on combustion. New brands were on the horizon, there was a hope for a new modern vehicular order but the midrange of the market was squatted by GM's insufficient vehicles. I don't think 2008's bailout worked, at all.
It worked for GM, and therefore for the politicians who got favors and influence from doing it, etc. A particular sense of "worked".
The government made a shit ton of money from 2008 by not letting them fail and buying preferred shares. Hell fannie mae and freddie mac throw off tons of cash for the government to this day.
Didn't we _not_ let industries fail during that time? How about the Big 3 bailouts and the emergency infusions for banks? And these actions decidedly helped save our economy.
Whether it's good from a moral perspective or a long term perspective I guess is another matter, but I suspect if the government hadn't stepped in, we'd still be in the throes of the subprime crash even today. This is speaking as someone who is deeply anti-corporate.
This is akin to letting all US banks fail and then saying we'll just use foreign banks for everything. Intel is a strategic company for the US.
>Did we learn _nothing_ from the 2008 subprime mortgage crisis? Let them fail.
2025 says "hold my beer"
If by "we" you mean anyone in the current administration, the answer is an obvious no. Learning is not their thing.
Kick the Tariff dog too often and it will bite. Huge Aluminum/copper/wood tariffs have moved Canada to export diversely. These supplies are tight and this year's production has been purchased in Europe/Japan/Asia who are short. Since the USA can not plant magic 1 year wood seeds = new growth 10-20 years out. Houses use a lot of wood/copper/aluminum = a bad 2-3 years comes knocking. Plastic(PEX) can make pipes, but they are a lower quality. Bamboo grows fast and can be used for glued under pressure wood for most uses, but it is not cheap made in the USA
This is setting up TSMC to also fail. As for Intel, it still will fail anyway.
How is this better? Smells like forcing Boeing to buy McDonnell Douglas.
If tariffs really raised money in the way Trump pretends then the US government could surely just grant Intel a direct share of all tarrif revenue raised from sales in to the US from Tawain?
Of course the reality is you're just taxing Americans to subsidise Intel at that point, since tarrifs are a tax on Americans and not foreigners.
> since tarrifs are a tax on Americans
So it really does raise money like trump "pretends"? Unless global trade ends, those tariffs will raise lots of money for the government. Even if it is the american consumer who ultimately pays the tariff.
isn't that just monopoly???
idk how we got to do this, like single producent of high end chips is not good for everyone
- have most wanted product and fab pipeline of the century
- be bullied by little Orange
- ???
- no profit
The US administration heavily underestimates how much every nation on the planet wants TSMC. This deal is so bad, just from a comparison point of view.
It's not like the EU, India, and other nations don't want chips. That's what the egocentric US administration doesn't seem to understand.
You can't bully nations into submission, at some point the winds will change.
Guess what, that already happened. The media in the EU is making a joke out of US politics on a daily basis since the start of this term.
China said they are going to invade in the next 5 years or so, so TSMC might agree to anything, but that goes a bit too far
Taiwan is under a tremendous pull by China, both non violent and violent. Any push by the US is a push towards China.
Trump has no idea what he is doing. HE can not replace Brazilian coffee, but at least it is "only" coffee. Not being able to replace a fab is a precarious situation.
Is he imagining invading Taiwan? China would consider that an invasion to its territory.
I don't think Trump cares if it "works" economically long term. He cares about what he can extract personally and what he got upset about on twitter when he woke up. That's it ...
He was quoted regarding environmental concerns something to the effect of "I'll be dead by then".
I think that's really his POV. If you plan to live longer than Trump, he's really not for you.
If 2008 didn't demonstrate that capitalism and market economics are a sham, then surely this type of market manipulation does.
There's going to be a lot of undoing actions that were taken because of an old bully who thinks the world is a celebrity game show.
Surely tariffs for 3 more years are less damaging than buying a sinking ship?
South African right wing farmers sold a story of a genocide and reverse racism, now they wish losing business because their exports are more expensive from the very tariffs that are a negotiation tactic to get their government to abolish or repel sine laws.
Someone with a gun to their head is the only party that would buy it.
Latest mindfactory data suggests that in gaming consumer space is now 96% AMD, 4% Intel. Seriously:
https://www.reddit.com/r/pcmasterrace/comments/1mfu3cq/this_...
And doesn't sound like their next or next next nodes are in good shape either
I just bought my first AMD chip in years (a 9950X3D), the last one I had was from the early FX series. After how poorly those FX chips performed, I swore off AMD for a long time.
Ryzen definitely caught my interest when it first came out, but Intel still had the edge in performance and stability back then, so I stuck with them.
That started to change with the 7800X3D, and now with the 97/9950X3D lineup, AMD is clearly ahead. I'm not even going to mention the "new" Intel chips.
Funny how things shift. I'm firmly in the AMD camp now.
And everyone I know is in the same boat. Probably 3-5 years ago Intel was the only "real" option for the people I know, now it's the exact opposite.
Probably longer, Ryzen 3000 came out 6 years ago. That was the beginning of AMD's CPU dominance IME. I built my first AMD system ever in 2019 - I had been Intel-only since my first computer (a PIII)
You are probably right w.r.t when they started becoming competitive. The reason why I mention the x3D chips is because Intel has literally still has no comparable product for them. If your application / game / whatever benefits from the extra cache, AMD blows intel out of the water.
>Latest mindfactory data suggests that in gaming consumer space is now 96% AMD, 4% Intel. Seriously:
That makes you think that this data is representative?
Mindfactory is widely used as proxy because its pretty much the only public data source on this that publishes monthly
If you have a better source I'm all ears
If we know that source is not representative, then why bother with drawing conclusions as extreme?
>If we know that source is not representative
Pray tell on what basis have you concluded this sales data is not representative?
If you have better data that drives your apparent certainty that the mindfactory data isn't representative - feel free to share
That's not how it works. The fact that Intel are doing abysmally is already priced in.
This excludes laptops
Why does the U.S. think they're so special?
Imagine if Taiwan/TSMC or even ASML were acting this childish. Refuse to sell chips or modern chip making technology to American companies = America would probably go to war with Taiwan or the Netherlands lmao. One trick pony.
What leverage do they have ? Not buying TSMC chip ?, lol
Trump's tariffs forced a historic trade deal between Japan, China, and Korea, three countries that historically hate each other. If Trump managed to accidentally force Taiwan and China to settle their differences, it might be a sign of the rapture.