Definitions ignore the reality of global technical supply chains

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Six months ago, the NVIDIA chip maker pollinated what he loved investors in the American economy: he had high profits in the sky, impressive innovation, and the founder of the leather jacket-Jensen Huang.

Now, however, the company inadvertently has become a symbol of the nightmares launched by US President Donald Trump.

Wednesday, Nafidia warned One of the profits on the horizon is $ 5.5 billion in the new US export restrictions on sales of its chips to China.

Huang moved as a duty to China, in an attempt to save his deals. But Congress has Unleash the investigation. Therefore – which is not surprising – the price of NVIDIA shares decreased, along with other technology companies, where investors set an unpleasant truth: NVIDIA problems are just a small (very visible) sign on a much wider wave of imminent technological disruption from Trump’s commercial wars.

There are at least three big lessons here. The first is that our modern political economy is chasing a cultural repulsion. In our daily life, we tend to behave and think as if the digital platforms on which we depend are present in an unprecedented field.

In fact, the electronic space depends on the physical infrastructure that we tend to ignore – and “the most complex supply chains (ever)) Conference at Vanderbilt University Last week.

Miller added that these supply chains express many limits to the point that “no one (country) is self -sufficient – not even soon,” noting that although Japan dominates the chip works (with the market share of 56 percent), the United States has a 96 percent stake in the electronic design automation program and Taiwan controls more than 95 percent of advanced chips. Meanwhile, China treats more than 90 percent of many critical minerals and magnets needed to make digital goods.

The second lesson is that the White House appears to be not ready for the consequences of disturbances in this complex supply chain. Looking, for example, the issue of critical minerals.

This week, Beijing Export control controls More than seven of these minerals, after Trump imposed 145 percent of the customs tariff on China. This was not surprising, 15 years ago, China imposed similar restrictions on Japan amid fighting.

In fact, the 2010 step in Japan shocked to the point that its companies and government agencies later devised huge stocks of these minerals and developed some alternative sources, Cut their dependence on China From 90 percent to 58 percent.

But it seems that the American entities did not follow their example: In Vanderbelt, I was told that American companies (at best) a few months of stocks. Even the Pentagon looks not ready. While the White House is now looking for alternative sources – from the sea floor or places like Ukraine – which is likely to take a few years to achieve, as a center for strategic international studies This week. This means that America “will be on the back of the foreseeable future,” as CSIS adds.

Of course, Trump’s advisers insist that this challenge is temporary, because America will eventually create a supply chain for local technology. This is the argument that is presented by Trump Akolit, such as Peter Navarro, Bob Leiser and Stephen Miran, and a book like Ian Fletcher And the three generations of generations of Jesse, Howard and Raymond Richman.

In fact, if you want to understand the motivation behind the country’s definitions recently announced, it is worth looking at Richman’s book Balanced tradeAnd Later article 2011. “Trump formula to calculate the specific country tariff rates is significantly similar to our suggestion (our proposals),” Jesse Richman says, Whoever cites numbers such as Warren Buffett and John Mainard Keynes as intellectual cosmetics in this customs tariff philosophy.

Maybe so. But even if you adopt the theories that lead such definitions – that most modern critics do not do, including me – it is deep foolishness imposed without accurate preparations. The start of a trade war with China without storing critical minerals is a particularly clear and stupid mistake.

Is it possible that this Trump retreats? maybe. Some of Trump’s advisers are ideologists, but the president himself (in) the famous transactions.

This in itself simply highlights the third main lesson here: it seems that the White House has poorly reduced China’s influence in a commercial war. After all, as CSIS, “China) is preparing a mindset in wartime” for a long time. However, “the United States continues to work under the conditions of peace time”, at least in the companies of companies.

This changes now, quickly. This means that investors must prepare for more technical shocks. NVIDIA is just the front edge in a possible storm.

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