Nelson de Sá: ‘Allies’ discover the price of American protectionism

Dianzi Shibao (DigiTimes), a well-known Taiwanese technology publication, reports that President Joe Biden and Apple CEO Tim Cook are traveling to Arizona next Tuesday for the formal opening of the US factory of Taiwanese chip giant TSMC.

The founder of TSMC, Zhang Zhongmou (Morris Chang), has resisted US pressure for the factory since the beginning of the year, including data on unviable productivity in the country, 50% lower.

But Washington’s subsidy billions spoke louder. Also the threats that, in the event of occupation by Beijing, its units on the island would be blown up by the US military. And the new factory will ultimately transplant Taiwan’s productivity.

This is what Taiwanese magazine Shangye Zhoukan (Business Weekly) revealed two weeks ago, with the cover above, accompanying the boarding of 300 people linked to TSMC on a chartered flight, to live in the USA, in time to present themselves for the photos with Biden and Cook.

It’s getting expensive, for the Taiwanese government. In local elections a week ago, the PDP was defeated by the opposition Kuomintang, leading to the departure of President Tsai Ing-wen – who still has more than a year in government – from command of her own party.

According to Taipei’s Zhongguo Shibao (China Times) newspaper, the images of the engineers being “delivered continuously”, with their families, “made Taiwanese feel that Taiwan was emptying out, and voters expressed their dissatisfaction”.

Another reason would have been the fear of war as in Ukraine, especially after the visit of the president of the USA, Nancy Pelosi, and the siege of the island by the Chinese military. But the loss of TSMC is more persistent, in the news repercussions on the island.

Zhang, the founder, accepted a second factory in Arizona and, under pressure from Apple, as reported by Bloomberg, will produce chips with more advanced technology, which he wanted to restrict to Taiwan. Furthermore, 70% of TSMC would now be under outside equity control.

More specifically, as reported by the Financial Times, Warren Buffett, George Soros and the Tiger Global and Bridgewater funds entered the composition of the giant, after its acceptance of production in the USA. TSMC, says Zhongguo, is becoming USMC, from the United States.

Biden’s industrial protectionism, which earned the critical cover of the British The Economist (above), affects other American allies. The subsidy for the manufacture of electric cars in the country is leading Germany and France to talk about a trade war.

On Thursday, the American president rolled out the red carpet at the White House for Frenchman Emmanuel Macron — who tried to resist the cuddles, repeating that subsidies threaten to deindustrialize Europe and “will divide the West”.

German financier Handelsblatt pointed out that “there is almost nothing substantial to report from the meeting between the two, just more banalities”, without effective concessions from Biden. Who even said, as highlighted by the German Die Welt in the title between quotation marks:

“America doesn’t apologize. And neither do I.”