President Donald Trump says he's imposing a 100% tariff on computer chips— a move that raises the specter of higher prices for electronics, autos, household appliances and other essential goods that depend on the processors.
Huh? No, it’s the opposite. You should really look up how tariffs work. They drive up prices for goods manufactured outside the US. Local goods are unaffected, giving them a competitive advantage.
I honestly can’t tell if you’re serious. You do know that the vast majority of the chips in all the devices you use are not manufactured in the US? Doubling the prices of the chips imported to manufacture devices here will obviously jack up the prices of those devices
The real problem seems to be that none of the news articles try to dig into what Trump’s vague and ambiguous wording actually means. They just report his nonsense verbatim. Does “building in the USA” mean building chips or building products containing chips?
The tariffs only apply to the imported products. That’s how tariffs work. If you import components into a US product then you only pay the tariff on those components, not the entire product.
It’ll probably be 100% tariff for the chip, and whatever the rate is for that country on the rest of the product. That’s assuming they go into that much detail, because if they don’t, it would be easy to dodge.
Pretty sure that’s their point. Say a product costs $100 dollars with no tariffs. If you import the product from the EU with a 15% tariff, it’s now $115 with tariffs (assuming no tariffs importing the chips into the EU). If you manufacture the product in the US, you need to pay 100% tariffs for all the chips. Obviously the impact depends on how much the chips cost relative to the entire product, but if the chips are half the cost ($50), then with a 100% tariff you’re now paying $150 for the product manufactured in the US.
Looking into it, the US implementation goes down into the components, so yes. Except, I believe it’d be $50 chip @ 100%, other components at whatever tariff rates they may have, and then the 15% per-country/region tariff applies to all of it on top. So if the other components have no tariffs, it’d be $172.50. I’m now wondering how expensive everything would end up if you have tariffs on materials as well.
In any case though, it becomes ludicrously expensive no matter what because you’re at most dodging the 15%.
EDIT: You can also dodge some of the tariffs if some percentage of the product is made in the US. I wonder if you’d be able to dodge the chip tariff if the materials for it were partially sourced from the US. If possible, that’d probably be cheaper for companies than actually trying to manufacture chips here.
EDIT 2: Actually your calculation may be right, I’m having a hard time finding how they’re actually meant to be calculated. Admittedly it seems a bit weird to me that the rate would override the country-specific rate and thus be the same for chips from the EU and China, but I suppose none of this makes sense in the first place.
Yeah, I’m guessing if you just imported the wafers but did packaging in the US, you could probably get an exception. But I’m not well-versed in the law to know.
Its really fucking lame to label everyone you don’t understand as a “troll/bot”.
I don’t know how many ways there are to explain that tariffs only impact imported goods. If it’s manufactured in the US, there is no tariff. This is, in fact, how tariffs work.
Sounds like you can save 85% by putting some googly eyes on the chip and calling it a finished product. It’s Chippy, the pointy pet that fits in your pocket.
Not correct. Once again, tariffs only affect imported goods. If you buy an iPhone built in China (assuming you import to the US) you’re going to pay a tariff on the device.
If you buy a phone built in America, with Chinese processors, you only pay tariff on the processor.
He 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
What? Are you putting American chips in these phones manufactured in China? Why would you think they wouldn’t be subjected to the chip tariff?
If you manufactured it in the USA there are no tariffs. I don’t know why this is so hard to understand. Manufactured in the USA = no tariffs. Manufactured outside the USA = tariffs. It’s really that simple.
Labor has always been more expensive in the US, that’s why tariffs exist.
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.
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
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.
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
God, this response is just fucking lazy and boring. You could at least make interesting when you lob ad hominems because you don’t understand the conversation. We were not discussing the merits of tariffs, we were discussing the facts. And the fact is that tariffs only negatively impact imported goods, by nature of being a tariff…
Right, but this tariff, at least as I understand it, is on chips imported as chips, not on products that contain chips. An iPhone will, of course, be subject to some other damn fool tariff, but not this specific one.
Of course, my understanding of this specific tariff may be wrong.
That’s generally how tariffs work. A tariff on grain is not a tariff on bread. A tariff on steel is not a tariff on knives. A tariff on cotton is not a tariff on clothing.
It can be, of course. A tariff can be on steel and items made with steel. But that’s not usually the case, and it’s usually called out as such. Of course, Trump is not what you’d call the most precise communicator in the world, but all we can do is work with what he says.
If there is no alternative from US, the price of that product category as whole will rise, ultimately being paid by US citizens, meaning it is just a hidden tax rise 😘
Read all of the comments here. I’m not disagreeing that it would drive prices up, I’m disagreeing that there would be tariffs on American products, because that’s not how tariffs work.
This feels like semantics. Sure, domestically made products wouldn’t have tariffs directly applied. But they will still increase in price as a result of this policy.
Which most of us here have reduced to “prices will rise on USA made products as a result of these tariffs”.
So yes, tariffs aren’t applied to domestic productions directly, but the end product will still cost more and the reason will be the tariffs.
This is not semantics. The statement was “this will only affect goods manufactured in the US”. No amount of semantics will make that correct.
Otherwise yes, I agree.
To expand slightly, I don’t think tariffs are a inherently a bad idea. As part of a larger plan (in tandem with Biden’s “build back better” financial incentives and other measures) they can be effective. Yes, they will increase prices. That’s going to happen simply because the US generally doesn’t exploit exploit cheap/slave labor. At least nowhere near the level of China. In the long term, theoretically, it brings jobs back to America and the median income increases. If you want to talk about affordability there are an infinite number of ways to improve that as well.
However, the way Trump has implemented them is haphazard, lazy, and unclear. Without even a concept of a plan. And the next President could very well wipe them all out overnight, thereby fucking any factories that made the decision to migrate. So yeah, they will absolutely fail.
I think they assume that a USA device would have tariff only on the imported chips inside, whereas a device from another country would have its chips tariffed, as well as an additional tariff on the full device when imported.
I don’t know if this is the case or not because Trump is unclear and as others have pointed out this would be trivial to evade if components aren’t tariffed separately.
No matter what those in the USA would be paying more for electronics.
This was a few days ago but wasn’t it the case that imported chips to be used in American products would be tariffed at the time of import? Why wouldn’t that be the case?
Huh? No, it’s the opposite. You should really look up how tariffs work. They drive up prices for goods manufactured outside the US. Local goods are unaffected, giving them a competitive advantage.
I honestly can’t tell if you’re serious. You do know that the vast majority of the chips in all the devices you use are not manufactured in the US? Doubling the prices of the chips imported to manufacture devices here will obviously jack up the prices of those devices
Why wouldn’t I be serious? If they’re manufactured outside the US then they’re obviously not manufactured in the US?
I believe they’re referring to products made in the USA that contain chips.
As in importing chips would be 100% but importing a product that contains chips would be 15%?
The real problem seems to be that none of the news articles try to dig into what Trump’s vague and ambiguous wording actually means. They just report his nonsense verbatim. Does “building in the USA” mean building chips or building products containing chips?
The tariffs only apply to the imported products. That’s how tariffs work. If you import components into a US product then you only pay the tariff on those components, not the entire product.
Right.
Isn’t that in agreement with OP? Any products made in USA that contain chips will cost more to make due to the 100% tariff on the chips.
No, OP said it only applied to US products. It’s applied to all imported products. That’s what a tariff is.
So any product containing chips will have a 100% tariff applied?
Edit: product imported to the USA
It’ll probably be 100% tariff for the chip, and whatever the rate is for that country on the rest of the product. That’s assuming they go into that much detail, because if they don’t, it would be easy to dodge.
Yes, and since those products are only imported, it won’t affect US products, like I said.
Pretty sure that’s their point. Say a product costs $100 dollars with no tariffs. If you import the product from the EU with a 15% tariff, it’s now $115 with tariffs (assuming no tariffs importing the chips into the EU). If you manufacture the product in the US, you need to pay 100% tariffs for all the chips. Obviously the impact depends on how much the chips cost relative to the entire product, but if the chips are half the cost ($50), then with a 100% tariff you’re now paying $150 for the product manufactured in the US.
Surely the tariff would apply separately, so the imported cost would be $157.50 ($50 chip @ 100% tariff + $50 everything else @ 15% tariff).
If they didn’t apply separately, the tariff would be trivial to dodge.
Looking into it, the US implementation goes down into the components, so yes. Except, I believe it’d be $50 chip @ 100%, other components at whatever tariff rates they may have, and then the 15% per-country/region tariff applies to all of it on top. So if the other components have no tariffs, it’d be $172.50. I’m now wondering how expensive everything would end up if you have tariffs on materials as well.
In any case though, it becomes ludicrously expensive no matter what because you’re at most dodging the 15%.
EDIT: You can also dodge some of the tariffs if some percentage of the product is made in the US. I wonder if you’d be able to dodge the chip tariff if the materials for it were partially sourced from the US. If possible, that’d probably be cheaper for companies than actually trying to manufacture chips here.
EDIT 2: Actually your calculation may be right, I’m having a hard time finding how they’re actually meant to be calculated. Admittedly it seems a bit weird to me that the rate would override the country-specific rate and thus be the same for chips from the EU and China, but I suppose none of this makes sense in the first place.
Yeah, I’m guessing if you just imported the wafers but did packaging in the US, you could probably get an exception. But I’m not well-versed in the law to know.
Incorrect. Once again, tariffs are only for imported products. That’s how tariffs work.
I’m convinced you’re a troll/bot. That is not in fact how tariffs work since the chips are not made in the US.
Its really fucking lame to label everyone you don’t understand as a “troll/bot”.
I don’t know how many ways there are to explain that tariffs only impact imported goods. If it’s manufactured in the US, there is no tariff. This is, in fact, how tariffs work.
Sounds like you can save 85% by putting some googly eyes on the chip and calling it a finished product. It’s Chippy, the pointy pet that fits in your pocket.
What he means is, if I buy an iPhone built in China, this tariff won’t affect the price I pay.
But if I buy a phone built in America, with an imported processer, this tariff will make that phone more expensive.
Not correct. Once again, tariffs only affect imported goods. If you buy an iPhone built in China (assuming you import to the US) you’re going to pay a tariff on the device.
If you buy a phone built in America, with Chinese processors, you only pay tariff on the processor.
He 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
What? Are you putting American chips in these phones manufactured in China? Why would you think they wouldn’t be subjected to the chip tariff?
If you manufactured it in the USA there are no tariffs. I don’t know why this is so hard to understand. Manufactured in the USA = no tariffs. Manufactured outside the USA = tariffs. It’s really that simple.
Labor has always been more expensive in the US, that’s why tariffs exist.
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.
Why wouldn’t the tariff apply to chips already in devices? That’s the way its always been discussed.
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
That’s not correct.
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.
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.
Whether they can or do make their own chips is irrelevant to who is impacted by tariffs.
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
I don’t understand what any of that has to do with this discussion.
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
God, this response is just fucking lazy and boring. You could at least make interesting when you lob ad hominems because you don’t understand the conversation. We were not discussing the merits of tariffs, we were discussing the facts. And the fact is that tariffs only negatively impact imported goods, by nature of being a tariff…
Right, but this tariff, at least as I understand it, is on chips imported as chips, not on products that contain chips. An iPhone will, of course, be subject to some other damn fool tariff, but not this specific one.
Of course, my understanding of this specific tariff may be wrong.
Where do you see that?
That’s generally how tariffs work. A tariff on grain is not a tariff on bread. A tariff on steel is not a tariff on knives. A tariff on cotton is not a tariff on clothing.
It can be, of course. A tariff can be on steel and items made with steel. But that’s not usually the case, and it’s usually called out as such. Of course, Trump is not what you’d call the most precise communicator in the world, but all we can do is work with what he says.
That’s not how tariffs work. You can’t just circumvent them by packaging them differently.
Packaging, no. But manufacturing it into something else, yes.
Do you think a tariff on copper would apply to an iPhone? Or a tariff on oil?
…of course?
Do your iPhones usually take oil? 🤔
What about situations where there are no alternative us made products
Then there are no US products to affect?
Are you a troll?
Or do you really not get it??
I honestly don’t get whatever “it” is. Again, if you don’t understand what a tariff is, it’s very simple to look it up. Don’t take my word for it.
If there is no alternative from US, the price of that product category as whole will rise, ultimately being paid by US citizens, meaning it is just a hidden tax rise 😘
I agree but that’s not what we were discussing
Read all of the comments here, there are many stating why this would drive costs way up.
Read all of the comments here. I’m not disagreeing that it would drive prices up, I’m disagreeing that there would be tariffs on American products, because that’s not how tariffs work.
This feels like semantics. Sure, domestically made products wouldn’t have tariffs directly applied. But they will still increase in price as a result of this policy.
Which most of us here have reduced to “prices will rise on USA made products as a result of these tariffs”.
So yes, tariffs aren’t applied to domestic productions directly, but the end product will still cost more and the reason will be the tariffs.
I think we agree now, yes?
This is not semantics. The statement was “this will only affect goods manufactured in the US”. No amount of semantics will make that correct.
Otherwise yes, I agree.
To expand slightly, I don’t think tariffs are a inherently a bad idea. As part of a larger plan (in tandem with Biden’s “build back better” financial incentives and other measures) they can be effective. Yes, they will increase prices. That’s going to happen simply because the US generally doesn’t exploit exploit cheap/slave labor. At least nowhere near the level of China. In the long term, theoretically, it brings jobs back to America and the median income increases. If you want to talk about affordability there are an infinite number of ways to improve that as well.
However, the way Trump has implemented them is haphazard, lazy, and unclear. Without even a concept of a plan. And the next President could very well wipe them all out overnight, thereby fucking any factories that made the decision to migrate. So yeah, they will absolutely fail.
They increase demand for domestic goods and therefor raise the price of goods that were already more expensive than the imported goods.
deleted by creator
So you’re an AI right? Like no real person would believe this
WTF are you talking about? Did you not go to elementary school?
I feel like there must be a miscommunication/misunderstanding here.
No, they’re trolling. There’s zero chance this was explained this many times and they’re still fighting like they don’t understand what is being said
I think they assume that a USA device would have tariff only on the imported chips inside, whereas a device from another country would have its chips tariffed, as well as an additional tariff on the full device when imported.
I don’t know if this is the case or not because Trump is unclear and as others have pointed out this would be trivial to evade if components aren’t tariffed separately.
No matter what those in the USA would be paying more for electronics.
“Trolling” = discussing facts? You are the one who doesn’t understand. It’s very simple: US tariffs do not apply to US products.
This was a few days ago but wasn’t it the case that imported chips to be used in American products would be tariffed at the time of import? Why wouldn’t that be the case?
Agreed.