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The Trumpian Roots of the Chip Crisis


Trumpian Roots of the Chip Shortage

In high technology, especially semiconductors, Trump began imposing export restrictions...with an apparent lack of awareness that, in many cases, China could simply turn to other suppliers.

Why are we facing a semiconductor shortage? Part of the answer is that when Trump took us into a trade war with China, there was clearly a lot he and his advisers failed to understand about modern world trade. Among other things, they didn't seem to grasp that modern trade consists not of simple exchanges of goods—they sell us cars, we sell them aircraft—but of complex supply chains, in which the production of a given item often involves activities spread across the globe.

The Trump tariffs focused mainly on intermediate inputs, like semiconductors and capital equipment, which American companies need to compete in the world market.

From The New York Times
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