Comment on Trump says he plans to put a 100% tariff on computer chips, likely pushing up cost of electronics
Wispy2891@lemmy.world 3 weeks agoHe meant that this is a disincentive to manufacture a phone in the USA.
Phone built in china: 30% tariff on the total assembled unit (this week is 30% or it changed again?)
Phone built in USA: 30% tariff on all the components because they’re made in China, 100% tariff on the processor, AND spend 1000% more in assembling the device because finding, training and paying skilled workers is way more expensive
Maybe there might be an incentive to move production to a country different from China, but the situation changes too wildly. The risk of spend millions to move production to Vietnam to get a lower rate, then a week later Trump gets diarrhea from eating a bahn mi and imposes an immediate 50% tariff as revenge
artyom@piefed.social 3 weeks ago
What? Are you putting American chips in these phones made in China? Why would you think they wouldn't be subjected to the chip tariff?
BeardedGingerWonder@feddit.uk 3 weeks ago
The question comes down to whether a phone with a chip in it is subject to the tariff or just raw chips being imported. No one is putting a US chip in it, because US chips don’t exist. The foundries to make them don’t exist.
If the assembled phone is subject to a “phone” or “general” tariff at 30% and not the 100% chip tariff then it incentivises manufacturing in china vs the US is what I think the OP is saying.
artyom@piefed.social 3 weeks ago
Why wouldn't the tariff apply to chips already in devices? That's the way its always been discussed.
overload@sopuli.xyz 3 weeks ago
Because tariffs are crude pieces of legislation. The US can’t make their own phones anyway, even with 1000% china tariffs, for years. You can’t just click your fingers and have manufacturing at that scale and quality exist.
Wispy2891@lemmy.world 3 weeks ago
tariffs are over the final product, not the individual components inside that product.
For example Ford was making a cargo van in turkey, but thanks to the chicken tax that they themselves lobbied for, a cargo van made in turkey would have a 25% tariff. Solution: make passenger vans in turkey, import them with 0% tariff, then pay an american to remove and send the passenger seats to the landfill and get a cargo van
can@sh.itjust.works 3 weeks ago
Perhaps somehow we still believe he wouldn’t fuck over Americans that much.
There’s chips in everything and they simply won’t be made domestically any time soon.
Wispy2891@lemmy.world 3 weeks ago
there’s a youtube video from “smarter every day” that showed his attempt to make something 100% in the USA.
The item was just a barbecue scrubber, with just a few components.
He needed a simple screw… NOBODY made that in the US…
He needed a simple plastic knob… NOBODY made that in the US (he bought 10k “american” knobs but once arrived there was a MADE IN COSTA RICA sign)
He wanted to make injection molds in the US… NOBODY did that, he had to find some retired expert to help him.
So, if you assemble stuff in US, you still need to import EVERYTHING, paying the same tariff and with more expensive labor. Tariffs need to be carefully considered and target a specific item in order to have some positive effect
artyom@piefed.social 3 weeks ago
I don't understand what any of that has to do with this discussion.
Wispy2891@lemmy.world 3 weeks ago
Serious or trolling?
You said:
Then I explained to you why it works like this:
Manufactured in the USA = tariffs and expensive labor.
Manufactured outside the USA = tariffs and cheap labor.
It’s really that simple.
Tariffs on everything is an incentive on manufacturing outside the USA as the supply chain is missing and all the parts need to be imported too.
The story would be different if those were targeted tariffs on specific products. In that case it would work in the opposite way