[throw0101a]

> His strategy is to put tariffs on chip imports and foreign chip manufacturers would have to build US based plants on their own dime.

The counter-argument (FWIW):

> Tariffs are paid by the importer and not the exporter. The Semiconductor Industry Association (SIA) claims that tariffs would not cause fabs to be built in the US, due to the cost of the factories, which can run from $18bn to $27bn.

> "No tariff amount will equal the costs of ripping apart these investments and efficient supply chains that have enabled current US industry leadership," SIA said.

> It added: "Moreover, chip tariffs will drive away manufacturing in advanced sectors that rely on semiconductor technology, such as aerospace, AI, robotics, next-generation networks, and autonomous vehicles. If the cost of key inputs like semiconductors is too high, tech manufacturers will relocate out of the US, costing jobs and further eroding US manufacturing and technological competitiveness."

* https://www.datacenterdynamics.com/en/news/trump-bashes-chip...

Foreign chipmakers would not pay the tariff (contrary to what Trump thinks) but their US customers, and what incentive to the foreign chipmakers to make changes? They're getting the same money and it's not costing them a dime. And where else are US businesses going to go for the product?

[thehappypm]

Even if the exporters are not directly paying the tariffs, their chips will cost consumers more, reducing the demand. So no; they’re not getting the same money.

[bruce511]

If you were talking about some discretionary thing, like magazines, I'd agree with you.

But customers don't buy chips, they buy stuff, and chips are in everything. There's the obvious (phones, tablets etc), but also everything else, like cars, washing machines, tvs, air fryers, plus more.

Clearly tarrifs drive (domestic) prices up, which will cause some level of inflation, but it will be across the board (not on "chips"). And clearly that will weaken demand.

But given global demand that will likely not be all that noticeable. Indeed it'll likely just result in US manufacturing being less competitive. Certainly it'll make US manufactured products more expensive on the world market.

Which likely leads to more American plants moving offshore, not onshore.

[dylan604]

your premise is that nobody else would by chips from them if the US demand lowered. I don't buy into that premise.

[throw0101a]

> Even if the exporters are not directly paying the tariffs, their chips will cost consumers more, reducing the demand. So no; they’re not getting the same money.

So the higher cost of cars—because they have chips in them that cost more and that is passed onto drivers—will stop people from buying cars?

The higher cost of microwaves will stop people from buying microwaves? And stop buying stoves? And refrigerators?

People will buy fewer smartphones? Businesses will buy fewer laptops and servers?

[Spivak]

Depending on how bad the hike is, maybe? You're essentially arguing that consumers are unresponsive to price increases which just isn't true.

If the hike is bad enough we might see a return to kitchen electrics that don't use microcontrollers at all. Unironically good news if you want physical buttons again.

[throw0101a]

> Depending on how bad the hike is, maybe? You're essentially arguing that consumers are unresponsive to price increases which just isn't true.

I'm arguing there are items that are less elastic when it comes to prices:

* https://www.investopedia.com/terms/p/priceelasticity.asp

Someone lives in the US, which is addicted to sprawling, car-centric suburbs. Car prices go up. What are they going to do? Walk? Bike? Take public transit? (Which is one of the arguments for (so-called) 15 minutes cities: it gives people more freedom to choose their mode of transportation instead of forcing one particular mode.)

Are you not going to buy a refrigerator when yours break down and food starts going bad?

While they can stretch out the depreciation/lifespan schedule, are business going to stop buying laptops and servers? If their (capex) costs go up, are the businesses going to eat that cost or pass it on to their customers?

[lesuorac]

As much as I don't think Trump thinks things out longer than it takes to say.

You can't be using the trade association's comment at face-value. Tariffs have absolutely caused factories to be build elsewhere (see car manufacturing) although where a chip site appears in the US or Mexico/Canada (NAFTA) is very arguable.