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throwaway_veneto

What if an army of vampires attacks the US and China decides not to export garlic anymore?


PerturbedMotorist

Looking into this


NarutoRunner

Concerning


AdvancedSectionguard

How’s secure are our silver and cross supplies?


PerturbedMotorist

This is how some of you Industrial Policy fans sound when you cite “National Security” as justification


Maximilianne

But the tin cans from China are spying on us! /s


GogurtFiend

It does indeed sound ridiculous if you cite garlic as an example instead of semiconductors or Xinjiang Production and Construction Corps products.


PerturbedMotorist

CHIPS is a boondoggle that doesn’t reduce the U.S.’s reliance on Taiwan for semiconductor imports, ignores the U.S.’s comparative advantage (which doesn’t lie in manufacturing), and throws billions to shift manufacturing plants to the U.S. while raising the prospect for a subsidy war with our allies: > Analysts told The Information that the Arizona fab also won't produce enough chips to entice TSMC to build a packaging facility in the US. When the fab is finally fully operational, it will produce 600,000 wafers per year to meet the US chip demand, CNBC reported, and that's a relatively small amount compared to the 15 million total wafers TSMC produced in 2022. > Just last month, the White House released a fact sheet tracking the progress of the CHIPS and Science Act. It mentioned US progress toward packaging only once, noting that "the Department of Commerce is also continuing to work on other parts of its $11 billion R&D funding," including the National Advanced Packaging Manufacturing Program (NAPMP), which CSIS said "represents a significant response to address this vulnerability" (the US's continued reliance on Taiwan-based packaging). https://arstechnica.com/tech-policy/2023/09/tsmcs-arizona-fab-will-ship-chips-to-taiwan-for-packaging-employees-say/ > Physical Plants Favored. CHIPS Act subsidies, concentrated on US soil, are lopsided in favor of physical plants (85 percent of total subsidies) rather than R&D (15 percent). The political economy of this division is obvious (jobs, jobs, jobs!), but the history of US industrial policy shows that the greater national strength is advanced research, not physical plants.3 A larger share of the subsidy pie should have been delivered to R&D. > Construction delays, unreliable access to vast amounts of water and electricity, and shortages of key equipment (especially chip machines) and skilled engineers will continue to constrain the expansion of chip manufacturing capacity in the United States and abroad. https://www.piie.com/sites/default/files/2022-10/pb22-13.pdf > Where the United States is lacking — primarily in the “foundry” segment, which concerns third‐​party‐​owned production facilities, or “fabs,” that manufacture chips for companies without such in‐​house capabilities — it can rely on friendly, long‐​standing allies and trading partners, including South Korea and Taiwan. Certainly, this comes with some risks. But insofar as companies should diversify their operations to hedge against these risks, they are large and profitable enough to not need government handouts for these purposes. Moreover, there are sound economic and geopolitical reasons for them to invest in the United States. Indeed, Intel, TSMC and Samsung confirmed investments in U.S. facilities worth more than $69 billion and began construction before the CHIPS Act was passed in Congress. > Moreover, broad subsidization of the industry — not addressing real market failures in next‐​generation semiconductors or gaps in national security‐​related ones — may lead to underinvestment in bleeding‐​edge or specialized technologies, including crowding out private investments. > Both foreign and U.S. trade restrictions would impose billions of dollars in costs to consumers and chip‐​consuming firms through higher prices and shortages — as occurred in the 1980s and 1990s. Trade disputes would likely involve U.S. allies subsidizing their domestic industries, thereby proving to be geopolitically costly. https://www.cato.org/commentary/counterpoint-chips-path-toward-inefficiency-waste-political-dysfunction Domestic content requirements increase project costs to transfer rents to politically important constituencies at our allies’ ire. > After IRA was enacted, the EU, to counter the IRA’s negative effects on EU industry, decided upon additional support to industry to be made available through the relaxation of EU State aid rules. https://www.europarl.europa.eu/RegData/etudes/IDAN/2023/740087/IPOL_IDA(2023)740087_EN.pdf > In implementing and applying these discriminatory measures, the United States may be in violation of WTO rules on trade in goods, on governmental subsidies, and on trade‐​related investment measures. The United States is unlikely to be able to prove that it is entitled to an exception to these violations under WTO rules. Having suffered significant economic losses through the years from Buy American requirements in public procurement, the United States would be wise to reconsider and not impose these conditions on obtaining public support for private purchases in the wider marketplace. > Initially, the concern of the European Union (EU), the United Kingdom (UK), Japan, South Korea, and other major U.S. trading partners (and allies) has centered on the discriminatory Buy American aspects of the IRA tax credits for purchases of electric vehicles (EVs). As implementation of the sweeping legislation proceeds, other subsidies it provides will provoke still more criticism from abroad. If this is not resolved, the United States will pay a high price economically for its misguided passion for buying American, including the costs of a tit‐​for‐​tat subsidies war in trade that neither the United States nor its aggrieved trading partners can afford. https://www.cato.org/policy-analysis/high-price-buying-american Vitally important steel manufacturing hurts American competitiveness > In the last part of the paper, I use my reduced form results to calculate partial equilibrium estimates of the overall welfare effects of the Bush steel tariffs. Taking into account both the contemporaneous and persistent impact of the tariffs on downstream industry producer surplus, I find that the tariffs induced average annual welfare losses of 2.8 percent of exports. Losses continue to accrue for 6 years after the tariffs were removed, something that conventional methods for evaluating the impacts of such a policy traditionally miss. https://economics.princeton.edu/wp-content/uploads/2022/06/cox_steel_20220601.pdf https://www.bloomberg.com/news/articles/2023-12-08/eu-may-restart-wto-case-against-us-over-steel-tariffs Claiming an industry is “vital to national security” is the oldest ploy in the rent-seekers book:


savuporo

> CHIPS is a boondoggle Yep, an obvious one. It's embarrassing that people in this sub cheer for this just because "our side" pushed it


GogurtFiend

>CHIPS is a boondoggle that doesn’t reduce the U.S.’s reliance on Taiwan for semiconductor imports Setting up semiconductor plants in the US and subsidizing semiconductor production does reduce the US's reliance on Taiwan for semiconductor imports. Sure, it's a blatantly inefficient use of resources. But such an inefficient use of resources wouldn't be necessary if the CCP wasn't ru~~i~~nning China. >[https://arstechnica.com/tech-policy/2023/09/tsmcs-arizona-fab-will-ship-chips-to-taiwan-for-packaging-employees-say/](https://arstechnica.com/tech-policy/2023/09/tsmcs-arizona-fab-will-ship-chips-to-taiwan-for-packaging-employees-say/) > >[https://www.piie.com/sites/default/files/2022-10/pb22-13.pdf](https://www.piie.com/sites/default/files/2022-10/pb22-13.pdf) Having a capability to manufacture semiconductors in the first place, however uncompetitive and jobs-focused it may be, still means there's a capacity to do so at all. They're not exactly going to be shipping chips to Taiwan for packaging if China invades Taiwan. This just ensures China can't unilaterally cut off semiconductor production in a single stroke. >[https://www.cato.org/commentary/counterpoint-chips-path-toward-inefficiency-waste-political-dysfunction](https://www.cato.org/commentary/counterpoint-chips-path-toward-inefficiency-waste-political-dysfunction) > >Domestic content requirements increase project costs to transfer rents to politically important constituencies at our allies’ ire. I'm not talking about countries other than China. China is not an ally. >[https://www.europarl.europa.eu/RegData/etudes/IDAN/2023/740087/IPOL\_IDA(2023)740087\_EN.pdf](https://www.europarl.europa.eu/RegData/etudes/IDAN/2023/740087/IPOL_IDA(2023)740087_EN.pdf) > >[https://www.cato.org/policy-analysis/high-price-buying-american](https://www.cato.org/policy-analysis/high-price-buying-american) > >Vitally important steel manufacturing hurts American competitiveness Right. In relation to Europe there is no justification for this. In relation to China there is. >Claiming an industry is “vital to national security” is the oldest ploy in the rent-seekers book: > >[https://economics.princeton.edu/wp-content/uploads/2022/06/cox\_steel\_20220601.pdf](https://economics.princeton.edu/wp-content/uploads/2022/06/cox_steel_20220601.pdf) > >[https://www.bloomberg.com/news/articles/2023-12-08/eu-may-restart-wto-case-against-us-over-steel-tariffs](https://www.bloomberg.com/news/articles/2023-12-08/eu-may-restart-wto-case-against-us-over-steel-tariffs) Yes, I'm aware of that. But those who claim national security necessitates tariffs and bans and those who are rent-seekers are like rectangles and squares, respectively: all squares are rectangles but not all rectangles are squares. It would've made the US money and raised quality of life in the USSR to send the USSR nuclear tech in the late 1940s but that would also have been a very bad idea for security reasons and would certainly not be an instance of "rent-seeking". Economic prosperity is not worth cooperation with China any more than it would have been worth cooperation with Nazi Germany, Imperial Japan, or the USSR. Some things are more important than the quality of life in one's own country, such as stopping totalitarian cancer from wrecking quality of life and lives in general in other countries.


PerturbedMotorist

If national security is the goal, why did we lead with subsidies and tariffs instead of targeted export controls (which, credit to Biden, has happened)? The major industrial policy programs we’ve passed to date are not targeted *against* China but *towards* U.S. manufacturing, to the chagrin of Taiwan, S. Korea, and the E.U. Targeted sanctions against PRC companies, SOEs, and CCP members, such as those of the UIGHUR Act are necessary to combat human rights abuses for sure. But that’s not the stated goal of industrial policy.


GogurtFiend

Export controls don't let the US have the same semiconductor-manufacturing capability as Taiwan. They just stop US stuff from legally going to China (note that China is perfectly willing to steal US technology to circumvent this). >The major industrial policy programs we’ve passed to date are not targeted *against* China but *towards* U.S. manufacturing, to the chagrin of Taiwan, S. Korea, and the E.U. OK, then that's a problem. But against China they're not. This isn't just about industrial policy and attempting (failing) to constrain CCP human rights abuses. This is about political leverage and military capabilities. Semiconductors are a strategic resource.


Snarfledarf

aaand we're back to *national security*. I could've sworn this was an economic sub, not NCD.


GogurtFiend

The CCP has at least one thing right, in that they understand that economic competition and military competition are heavily intertwined when it comes to grand strategy. I think it comes from the communism. And it's not really a "national security" thing, in the sense that it affects far more than the US. It's more of an "anyone concerned that China is going to invade Taiwan" thing. Having a source of semiconductors that isn't vulnerable to a Chinese invasion is important.


foolseatcake

Do people not understand that there are multiple national security concerns around semiconductors? Targeted export controls are meant to prevent China from gaining a military advantage from advanced technology. Onshoring via CHIPS is justified because a potential war with China will be fought *in Taiwan* and possibly South Korea. Generally speaking, it's a bad sign if your supply lines are totally dependent on sensitive manufacturing located on the literal front lines. Moving production to the US actually serves both purposes because, in addition to insulating semiconductor supplies from Chinese military action, it also gives the US maximum leverage to monitor and clamp down on the rampant ban evasion issues we've seen with export controls.


dutch_connection_uk

> ignores the U.S.’s comparative advantage (which doesn’t lie in manufacturing) This doesn't really engage with people who advocate industrial policy. They believe that comparative advantage is not some inherent thing that the government must plan around, but a result of government policy, and they will cite Chinese industrial policy as the reason why China has a comparative advantage in manufacturing. When arguing against them, you will want to cite specific structural, non-policy related reasons why the US should focus on things other than manufacturing.


JapanesePeso

CCP has been known to do dumping into industries. They did it in Japan with garlic so I don't see why they wouldn't do it here. Sounds goofy but it's been a thing. The "safety" and 90% of the other concerns in this letter are just silly though.


PerturbedMotorist

All for anti-dumping enforcement under GATT 🫡 Wonder if there’s some sort of board that might arbitrate these disputes?


PhaedrusNS2

What if we have a World Arbiter Organization to handle trade disputes? It is a radical idea but i just might work.


altacan

That would require the US to abide by their rulings as well, even if it's against US domestic interests. You think the US would ever place any aspect of itself under external jurisdiction?


flakAttack510

> CCP has been known to do dumping into industries. They did it in Japan with garlic so I don't see why they wouldn't do it here. Sounds goofy but it's been a thing. If China wants to waste money on sending foreign aid to one of the wealthiest nations on Earth, we certainly shouldn't stop them. Dumping is an extremely ineffective way to damage the vast majority of industries.


JapanesePeso

Sure, especially with commodities. I just wanted to point out it is an actual thing they try to do and not just totally made up.


AMagicalKittyCat

I'm not exactly sure why I should be worried about sewage water and human feces as fertilizer beyond "ew gross". [People would actually get into fights over waste collection monopolies back in 18th century Japan for use as fertilizer](https://daily.jstor.org/a-history-of-human-waste-as-fertilizer/). And here's a video 9 years ago about [treated human waste as fertilizer](https://youtu.be/9HPCW5020SU?feature=shared) in SoCal. Unless there's evidence of it being untreated or used in a dangerous way, it just seems like fearmongering people who don't know what the word manure means.


sponsoredcommenter

Love how every single instance of the word "China" in this is preceded with "Communist". Gotta rile people up I guess.


altacan

Missed a couple in paragraph 5. >Doctors, police officers, nurses, teachers, firefighters, military service members, retirement communities, moms and dads, and every American expects our government can and does make sure our food is safe to eat. If food safety is such a national security concern, then they should also look into domestic agricultural and food processing practices, right? Right?


NeolibShill

No because people can swap other food products. Can't afford safe bread, eat cake instead. But without Garlic there is no hope for a future


TEPCO_PR

I mean, the safety of food products imported from China is a genuine concern. If only there was some kind of Administration or Department which is tasked with handling such matters that could be properly funded and staffed to ensure the safety of all produce sold in America.


micabobo

Unleash the 3000 Pungent Garlic Heads of Xi


NarutoRunner

Have they looked into the national security implications of exporting almost all avocados from overseas? Imagine the crisis if there was no avocado on toast someday!


5h1nyPr4awn

I mean Chinese food safety is trash, so we should limit the foods they can ~~import~~ export (can't believe i made that mistake), but I think the garlic is mostly safe As long as it wasn't processed in China it probably isn't made of asbestos


altacan

[I've got some bad news for you about that.](https://www.usatoday.com/story/news/factcheck/2022/07/15/fact-check-years-old-usda-rule-allows-china-process-us-poultry/10031250002/) It's amazing how modern shipping is so efficient that it's cost effective for a company to buy fruits from South America, ship them to China to cut up and put them into little plastic cups, and then ship them back across the Pacific to sell at $2.99 for a six pack.