"Econ 102" with Noah Smith and Erik Torenberg Mini: Tariffs on China, Trump, and National Security
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Oct 25, 2024 The discussion kicks off with the economic implications of the CHIPS Act and the Inflation Reduction Act on national security. The hosts delve into how U.S. tariffs impact the EV and semiconductor industries, highlighting the push for domestic manufacturing. Attention shifts to the struggle of renewable energy initiatives, caught in local opposition and political stalemate. The challenges of tariffs on Chinese electric vehicles and the influence of non-tariff barriers on trade are also explored, revealing complex interactions between competition and security.
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CHIPS Act Importance
- The CHIPS Act helps rebuild the US semiconductor industry, crucial for economic and national security.
- Semiconductors are vital for various industries, and the CHIPS Act helps counter China's growing influence.
TSMC and Subsidies
- TSMC initially delayed CHIPS Act projects, claiming delays, but quickly resumed after subsidy commitment.
- This demonstrates the effectiveness of government subsidies in incentivizing crucial industrial projects.
Inflation Reduction Act vs. China
- The Inflation Reduction Act is dwarfed by China's green tech subsidies, requiring US protectionist measures like tariffs.
- China's massive subsidies will likely lead to company failures but also drive down costs and scale production.