In text form:
Abstract
Amid the current U.S.-China technological race, the U.S. has imposed export controls to deny China access to strategic technologies. We document that these measures prompted a broad-based decoupling of U.S. and Chinese supply chains. Once their Chinese customers are subject to export controls, U.S. suppliers are more likely to terminate relations with Chinese customers, including those not targeted by export controls. However, we find no evidence of reshoring or friend-shoring. As a result of these disruptions, affected suppliers have negative abnormal stock returns, wiping out $130 billion in market capitalization, and experience a drop in bank lending, profitability, and employment.
Quote from conclusion
Moreover, the benefits of U.S. export controls, namely denying China access to advanced technology, may be limited as a result of Chinese strategic behavior. Indeed, there is evidence that, following U.S. export controls, China has boosted domestic innovation and self-reliance, and increased purchases from non-U.S. firms that produce similar technology to the U.S.-made ones subject to export controls.
The CHIPS act was nerfed by lobbyists. It was supposed to ban companies from simply redirecting money overseas.
For instance, suppose Intel gets 8.5 billion in CHIPS act money that it’s supposed to spend domestically. And suppose that in a given year they spend 10 billion dollars in the US and 30 billion dollars overseas. So they get the CHIPS act money and they spend 10 billion dollars in the US and 38.5 billion dollars overseas. That looks like they spent the CHIPS act money overseas, right? Nope, according to Intel’s accountants, the CHIPS act money was spent domestically, but then Intel realized they had an extra 8.5 billion dollars and just went ahead and spent that other money overseas.
Like, the exact dollars they got, those they spend domestically, but then that “freed up” other dollars to spend overseas.
That these companies would do this was predicted and there were controls in the bill to prevent that, but the companies (Intel, IBM, etc) got all those controls stripped out of the bill.
Intel is run by the same MBA/Financier scum that destroyed Boeing. Their “leadership” is what caused the US to lose the industry we created in the first place. The idea that giving those scum billions of dollars would fix anything is a laugh. The CHIPS act should have began by nationalizing Intel, firing the entire executive suite along with all the MBAs and consultants at the company.
The CHIPS acts was an unworkable idea from the very start, and everybody with even a minimal clue about how the chip industry operates understood this https://compactmag.com/article/fighting-a-chip-war-on-the-cheap
David P. Goldman is deputy editor of Asia Times and a fellow of the Claremont Institute’s Center for the American Way of Life.
What a fash-coded name for a think tank. Might as well call it the Center for Securing the Existence of Our People and a Future for White Children.
Incredibly prescient article.
That article mostly seems to be arguing that the CHIPS act giveaway is too small. Maybe it is, but the fundamental problem is that our largest corporations are being run by traitorous, globalist wreckers who will undermine our national economy by taking the money and using it to accelerate offshoring. If Chinese CEOs tried to pull this stuff they’d end up in reeducation camps.
I very much agree, the fundamental problem in the west is that capital stands above the government, and capitalists have no allegiance to any nation.
Counterpoint: undermining the West’s power is a necessary requirement for further progress.
