The Lure of the ‘Made in America’ Sales Pitch

Mr. Biden maintained the Trump administration’s tariffs on Chinese imports, while opening a new front in the trade war: computer chips. Under the CHIPS and Science Act, which was signed in August, the president unleashed $52 billion worth of direct subsidies to encourage companies to produce computer chips at factories in the United States.

Administration officials heralded the law as liberation from the constant vulnerability of relying on chip-makers in Taiwan, a self-governing island only 100 miles off the Chinese coast that is claimed by Beijing.

The government has also used tax credits to promote the domestic production of electric cars and batteries.

The result has been an industrial construction boom across the United States.

By the end of 2022, the chip industry had dedicated almost $200 billion to build and expand 40 factories in 16 states, generating 40,000 future jobs, according to the Semiconductor Industry Association. A similar sum of money has been promised for American plants making electric cars and batteries, according to the Natural Resources Defense Council, an advocacy group.

For now, growth in domestic manufacturing is dependent on federal largess.

“The national security concerns, and the geopolitics with Taiwan, those factors are motivators,” said Eskander Yavar, a managing partner at BDO, an international business consulting firm. “If there’s no subsidies in place, I think reshoring becomes a slower roll.”

Article source: https://www.nytimes.com/2023/03/25/business/the-lure-of-the-made-in-america-sales-pitch.html