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US reportedly forcing TSMC to buy 49% stake in Intel to secure tariff relief

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Re: US reportedly forcing TSMC to buy 49% stake in Intel to secure tariff relief

#541

Post by oezi »

Alupis wrote: post #110
notahacker wrote: post #77

Earlier quoted context omitted.

Of course not. But I think it's also true to say if the US hasn't been willing or able to effectively use its military power at the margin to stop a historic enemy from annexing its neighbours with impunity, your average regional power doesn't have to worry about the US using its military power to dominate world trade.

Nothing will change in the US if Ukraine falls tomorrow. People love to cry foul when the US flexes it's might... then cry foul when the US takes a back seat... literally cry foul no matter what the US does. If Ukraine is so important to the world order, why has Europe (you know, Ukraine's actual neighbors) not stepped up with their full military power? Why is Europe not threatening troops, missiles, aircraft, tanks,…

You are taking a short sighted view on what it means to be a super power.

If Putin wins in Ukraine, it will show everyone that the US is incapable to hold even a weak enemy such as Russia to account. It is irrelvant that you frame it as a choice rather than a failure.

Europe has been doing more than the US in absolute and relative terms to prop up Ukraine but it hasn't been enough to help Ukraine win. As a European, I would want our governments to put soldiers down and end the war, but Russia has been successful in the information war to make too many citizens afraid to enter with troops.

The US hasn't been saving the day for anyone without ulterior motives for a long time (ever?). You make it seem like it were generous moves to counter mostly Russia or e.g. ensure access to middle eastern oil.

The US has never spend money on its allies which it didn't believe has a large return. So the current Republican administration's view to reduce engagement is actually hurting themselves. Classic lose-lose.

Re: US reportedly forcing TSMC to buy 49% stake in Intel to secure tariff relief

#542

Post by herbst »

croemer wrote: post #531
herbst wrote: post #475

Earlier quoted context omitted.

So the assumption is they take the hit of 250% and just keep providing the US with these unique drugs when the US is "only" at max 20% of the total market? Afaik even less the more specialized drugs get. Edit:// it's not just me. Swiss media does barely seem to understand anything anymore either

A monopolists can set prices however they want (in contrast to competitive supplier of commodities where there's a market price). They want to maximize profits and if marginal cost of sale is negligible (as is the case for patented drugs) the optimal price is determined by the demand curve. The demand curve depends on the price the buyer sees including tariffs. So the price post tariff is the same as the price withou…

Thanks for the insights! Obviously I am economy noob.

> US has famously high drug prices due so cutting edge pharma makes much of its profits there

That's still weird to me. Switzerland has a cutting edge pharma market too and health care is affordable.

Re: US reportedly forcing TSMC to buy 49% stake in Intel to secure tariff relief

#543

Post by pjc50 »

Alupis wrote: post #201
coryrc wrote: post #187

Earlier quoted context omitted.

> People love to cry foul when the US flexes it's might... then cry foul when the US takes a back seat... literally cry foul no matter what the US does. There's a difference between the US invading Iraq and US aiding a country being invaded.

> US aiding a country being invaded Why can't the Germans send troops into Ukraine? Or the Brits (for all their grandstanding and bluster)? Why must it be the US? If "everyone" thinks Putin isn't going to stop with Ukraine, then it would seem Europe has an existential crisis to deal with - not the US, thousands of miles away...

There's plenty of threats by Putin to use first strike nuclear weapons if NATO troops directly engage Russian troops. So the current approach is indirect: British "military advisers" train Ukranians in the use of British Javelin missiles, but don't pull the trigger themselves.

Even a non-nuclear direct conventional war would get very messy very quickly. NATO would have to seize Kaliningrad and Belarus, start interning Russian nationals, rush forces to hold the Baltic states, and so on. It's not complicated to say "this will be very expensive and deadly, so we're not going to do it unless absolutely forced to".

European states are now re-arming (the irony of fate is that it's now US policy for Germany and Japan to re-arm), but that is going to take a while.

Re: US reportedly forcing TSMC to buy 49% stake in Intel to secure tariff relief

#544

Post by pjc50 »

oezi wrote: post #537
pjc50 wrote: post #472

Earlier quoted context omitted.

Entire discussion seems to be ignoring the Russian nuclear weapons, so the war has to be conducted entirely with Ukranian-flagged troops.

Why? Would the presence of peace western troops make a Nuclear strike by Russia more likely?

See https://news.ycombinator.com/item?id=44822385

"Peacekeepers" is obviously meaningless when there is no peace to keep, so the question is what happens when NATO troops attack Russian troops directly.

Re: US reportedly forcing TSMC to buy 49% stake in Intel to secure tariff relief

#545

Post by DrScientist »

tw04 wrote: post #204
cherryteastain wrote: post #32

Tariffs kinda make sense when you have a deficit in a widely available item. Big trade deficit with Bangladesh? Sure you can buy cheap textiles from Thailand or Vietnam or something. Unfortunately this approach does not work when you lack a viable domestic alternative and you're up against a monopoly. What will the US do if TSMC does not blink? Not buy TSMC made chips? Obviously that is impossible, so the logical con…

>so the logical conclusion is that American consumers will end up paying the tariffs. That’s been the point all along… they are significantly raising taxes on the bottom 90% of Americans and most are too stupid to even understand it. Gotta pay for those tax cuts for the wealthy somehow.

Sure that's potentially one effect- but I'm not sure it's the most important.

The other effect is to reduce international trade and the kind of national interdependency that creates, and so makes, large scale war highly unlikely.

The US is also trying to use it's economic power to force people to choose sides ( cf secondary sanctions on India ).

So while Trump might be anti-forever wars he is busy creating a world where WWIII is much more likely.

Re: US reportedly forcing TSMC to buy 49% stake in Intel to secure tariff relief

#546

Post by croemer »

eru wrote: post #540
croemer wrote: post #533

Earlier quoted context omitted.

Glad to see someone with economics knowledge! The best taxes are Pigouvian taxes on externalities. They not only raise revenue but distort the market in the right direction. Carbon tax comes to mind (though that's a tricky case as there is no world government, tax works best for local externalities like air pollution).

Well, for Pigouvian taxes to make sense, you first have to argue why in your specific situation Coasion bargaining breaks down. Similar to how, if you want to use 'market failure' to justify your favourite government intervention, it actually comes with lots and lots of restrictions and only justifies a very narrow slice of possible interventions.

Thanks for reminding me of that, it's been a while since I read Varian's Micro textbook.

There are lots of ways for Coase to break down. Lack of clear property rights, transaction costs etc

Re: US reportedly forcing TSMC to buy 49% stake in Intel to secure tariff relief

#547

Post by croemer »

herbst wrote: post #542
croemer wrote: post #531

Earlier quoted context omitted.

A monopolists can set prices however they want (in contrast to competitive supplier of commodities where there's a market price). They want to maximize profits and if marginal cost of sale is negligible (as is the case for patented drugs) the optimal price is determined by the demand curve. The demand curve depends on the price the buyer sees including tariffs. So the price post tariff is the same as the price withou…

Thanks for the insights! Obviously I am economy noob. > US has famously high drug prices due so cutting edge pharma makes much of its profits there That's still weird to me. Switzerland has a cutting edge pharma market too and health care is affordable.

Too many reasons for a reply here, but overall the common theme is lack of regulation giving pharma more power to play on their patent-derived monopolies.

As for Switzerland, it's a small country with an economic model that doesn't scale/generalize. Even in Switzerland there's constant discussion about health care (insurance) being too expensive - though the biggest driver is wages not drug prices.

Re: US reportedly forcing TSMC to buy 49% stake in Intel to secure tariff relief

#548

Post by izacus »

MBCook wrote: post #193
_hyn3 wrote: post #175

Earlier quoted context omitted.

What would TSMC do if they couldn't sell chips to the USA? It cuts both ways, like most trade negotiations.

Is “don’t buy stuff with TSMC chips” really a valid option we have? Isn’t that basically “stop buying high technology” to a large degree?

The amazing thing about (near) monopolies is that companies don't have to worry about folks voting with their wallets anymore.

Those pesky customers and their demands have been dealt with!

Re: US reportedly forcing TSMC to buy 49% stake in Intel to secure tariff relief

#549

Post by actionfromafar »

znpy wrote: post #454
frontfor wrote: post #349

Earlier quoted context omitted.

Manufacture domestically will result in price increases, which again hits the bottom harder than some of us here. Is this what we want?

Manufacture domestically and whatever the price increases is goes back into the local economy. Somebody is going to be paid for that work. Also, money circulating is what makes an economy strong.

Mm strong copper mines taste good.

Re: US reportedly forcing TSMC to buy 49% stake in Intel to secure tariff relief

#550

Post by mallets »

notepad0x90 wrote: post #502
mallets wrote: post #495

Earlier quoted context omitted.

It doesn't work if you don't have 1:1 product, which Intel foundry absolutely doesn't. Not in performance, price or just ease of use. No one is going to risk years and billions to get it working on Intel, that's a sure way to lose your edge. Companies (like Nvidia) will just raise prices and if demand drops they will divert more of it to countries like China and EU. And demand isn't going to drop much anyway for in-d…

You didn't address the fact that they have state-side facilities slated to open in 2026? You also said intel "doesn't" not "can't" isn't it more reasonable that demand will force supply to adapt. Why couldn't intel compete before? and why can't it going forward? China is working on TSMC rivals (if they haven't succeeded already), the west should just sit on its hands and wait for a military conflict with china becaus…

Their US facilities are purposefully NOT bleeding-edge, and also cost more.

And this version of Intel can't, maybe a different one that fully separates design and foundry could. The best solution long-term would be to directly subsidize foundries, with the right incentives to acquire different customers (how TSMC or Samsung operate). They just might get lucky if everyone hits a hard scaling wall.

Whatever happens, tariffs and bans are the absolute worst incentives for innovation and growth.

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