People like Musk rarely take into account the overall impact of this sort of tariff in the international chain.
I’ll give you an example. I live in Latin America. My processor is AMD, so made in USA. It was made with Taiwanese semiconductors. But let’s pretend that I were to upgrade my processor today.
Since AMD got the semiconductors from Taiwan it gets 25% tariffs. So if I were to buy this processor today I’d pay more for that processor, as AMD won’t simply “eat” the tariff.
Would I? Bloody hell, no way I would. I’ve run a potato computer for years, might as well do it in the future. If some Taiwanese, Chinese or European alternative pops up and it’s less unreasonably priced I’d be willing to buy it. Taiwan would still profit, the local market would still profit, but instead of a chunk of my money going to USA, it would go to one of those three.
Except that I’m not the only one. Plenty, plenty other people would do the same as I would. Slow but surely, international trade skips the middleman in USA and finds another middleman elsewhere.
AMD would get less profits. And there’s nothing that investors hate the most than lower profits. Instead of investing in USA, why not invest in one of those booming tariff-free alternatives? Vulture capital flies away in a flock, once the carcass is gone.
And it is not just CPUs; it’s also GPUs and everything else. And it is not just AMD, but Intel and every other business relying on Taiwanese microchips.
With less money entering USA, the local customer market ends slightly poorer. And it becomes less of a pressure to attend that market. In those situations, is it worth for AMD to keep itself in USA? Rename itself to “IMD”, set up base in Ireland, boom, done.
Musk is sinking the economy of his own banana republic maize dictatorship. And it’s getting amusing to see.
[And in case anyone is wondering why I’m saying “Musk” instead of “Trump”, it’s because I genuinely believe that the later is there because the former wants it, not the opposite. Trump is that sort of tiny useful idiot, easy to control, just call him “who’s a good boy? strong man? Yes, you are, Trump! Good boy! Strong man!” and he’ll bark in the desired direction.]
People like Musk rarely take into account the overall impact of this sort of tariff in the international chain.
I’ll give you an example. I live in Latin America. My processor is AMD, so made in USA. It was made with Taiwanese semiconductors. But let’s pretend that I were to upgrade my processor today.
Since AMD got the semiconductors from Taiwan it gets 25% tariffs. So if I were to buy this processor today I’d pay more for that processor, as AMD won’t simply “eat” the tariff.
Would I? Bloody hell, no way I would. I’ve run a potato computer for years, might as well do it in the future. If some Taiwanese, Chinese or European alternative pops up and it’s less unreasonably priced I’d be willing to buy it. Taiwan would still profit, the local market would still profit, but instead of a chunk of my money going to USA, it would go to one of those three.
Except that I’m not the only one. Plenty, plenty other people would do the same as I would. Slow but surely, international trade skips the middleman in USA and finds another middleman elsewhere.
AMD would get less profits. And there’s nothing that investors hate the most than lower profits. Instead of investing in USA, why not invest in one of those booming tariff-free alternatives? Vulture capital flies away in a flock, once the carcass is gone.
And it is not just CPUs; it’s also GPUs and everything else. And it is not just AMD, but Intel and every other business relying on Taiwanese microchips.
With less money entering USA, the local customer market ends slightly poorer. And it becomes less of a pressure to attend that market. In those situations, is it worth for AMD to keep itself in USA? Rename itself to “IMD”, set up base in Ireland, boom, done.
Musk is sinking the economy of his own
banana republicmaize dictatorship. And it’s getting amusing to see.[And in case anyone is wondering why I’m saying “Musk” instead of “Trump”, it’s because I genuinely believe that the later is there because the former wants it, not the opposite. Trump is that sort of tiny useful idiot, easy to control, just call him “who’s a
good boy?strong man? Yes, you are, Trump!Good boy!Strong man!” and he’ll bark in the desired direction.]picture related