Biden Launches A Full-Blown Economic War On China, It Will Backfire

Authored by Mike Shedlock via MishTalk.com,

The US thinks it can block microchip technology from China. It won’t and blowbacks are everywhere…

Turning the Screws 

• Financial Times: How the US chip export controls have turned the screws on China
• The Conversation: Clampdown on chip exports is the most consequential US move against China yet
• The Atlantic: Why Biden’s Block on Chips to China Is a Big Deal

How Companies Are Dealing with US Restrictions on Chip Exports to China

Please consider How Companies Are Dealing with US Restrictions on Chip Exports to China

The U.S. Commerce Department announced a series of new trade restrictions earlier this month that banned the export of some computer processing chips to China.

The restrictions affect not only U.S. businesses selling to China, but also any company whose products contain American chip technology. The U.S. government action has many companies considering how to move forward under the new rules.

Numerous American technology companies doing major business with China are facing possible severe damage to their profits. Other companies that manufacture technology products in China are having to withdraw U.S. employees because the ban also bars “U.S. persons” from supporting technology covered by the ban.

James Lewis is a senior vice president and director of the Strategic Technologies Program at the Center for Strategic and International Studies in Washington D.C. He told VOA the new restrictions seem to be “reshaping the market.”

“The Koreans, the Taiwanese and some American companies are really nervous about it,” Lewis said. “I mean, everyone’s asking, ‘What can I still sell to China?’ And in some cases, the answer is ‘nothing,'” he added.

In Britain’s Financial Times newspaper, U.S. national editor and columnist Edward Luce wrote that “Joe Biden this month launched a full-blown economic war on China.”

So far, chip companies have reacted carefully to the ban. While recognizing the government’s concerns, they have noted they were not given a chance to discuss the policy with U.S. officials before it was announced.

Call Them the Biden-Trump Tariffs Now

The Wall Street Journal comments Call Them the Biden-Trump Tariffs Now

President Biden has rolled back some of Donald Trump’s destructive tariffs, but not enough, and they’re still doing economic harm. New analyses of Mr. Trump’s Section 232 steel and aluminum tariffs show how consumers and manufacturers are still paying for the border taxes that benefit only a few companies.

A study by Harbor Aluminum for the Beer Institute finds that the 10% tariff on imported aluminum cost U.S. beverage manufacturers $1.7 billion from March 2018 through August 2022. About 93% of the $1.7 billion has been pocketed by domestic aluminum producers and smelters in the U.S. and Canada. Only $120 million has gone to the U.S. government.

While Biden relaxed some tariffs on China, the chip export ban is a sharp escalation in an economic war with China.

According to the Financial Times, China accounts for 33 per cent of sales at Applied Materials, 27 per cent at Intel and 31 per cent at Lam Research.

President Biden unequivocally blocked China’s access to high-end computer chips but how long can that last?

READ MORE HERE