The USA also thinks it is a big deal now by launching a formal investigation into Chinese legacy chips citing security reasons. Let us assume that as a result of such an investigation, the USA were to ban all Chinese legacy chips, what is going to be the consequence?
On the surface it is a step to deny Chinese legacy chips from being used in USA manufacturing, right? Wrong! Even the USA aircraft carriers, warships, drones, missiles and weapons made by the USA's Military Industrial Complex are still depending heavily on Chinese legacy chips. The USA wants to ban Chinese chips from being used by industries but kept discreetly mum about Chinese chips still being used in the USA military. See the hypocrisy?
Now, what will China do? China will do the same with USA made chips entering the Chinese market, citing National Security issues. National Security Issues are easy to use to target for convenience, but difficult to prove. The case of Huawei already says everything about the accusation. Where are the proofs after years of accusation?
40% of global chip production goes to feed China's Industries, be it EVs, solar panels, wind turbines and consumer products. That begs the question of who is losing more of whose chips market and whose semiconductor entities will suffer the greater damage? With all the huffing and puffing of rapidly setting up semiconductor manufacturing in the USA, even forcing foreign entities to set up facilities in USA, who are they going to sell the excess chips that those facilities are going to turn out in the face of a protracted chips war? McDonalds?
Biden is just busily setting up more time bombs for Trump, using his last days in office to do that. He wants to make sure Trump has no way to wriggle out of all the traps he sets. The good news arising from this is that both are going to make China and Russia even greater and the collapse of the USA faster and uglier.
1 comment:
Today, who is the one wanting decoupling more than the other? I believe China is doing the de-coupling more than the USA.
China is buying less and less of USA agricultural products like soya beans, wheat and corn. China is sourcing more and more of the above products from Brazil, Argentina, Russia and soon Indonesia which has joined BRICS at last. It is a win-win situation developing among the BRICS countries at the expense of the USA and the EU.
Trump can go ahead with his tariffs on Chinese products particularly on EVs which China has a very small footprint in the USA, in fact negligible. On the other hand, the USA is going to lose the Chinese and Global South market totally for its agricultural products, with Tesla already suffering loss of market share in the Chinese market as well. Elon Musk is trying to future-proof Tesla's market share in the USA by cozying up to Trump with his USA first policy, which will favor Tesla's position in the USA. But he faces a very delicate situation with Trump trying to get rid of immigrants which will have a cost factor effect for Tesla in the USA. Musk and Ramaswamy are facing a hostile response from the Whites that favors Trump's policy of deporting immigrants.
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