HANNAFORD: A moment when tariffs made sense for everybody

It would be hard to overstate the importance of President Trump’s announcement today, that the Taiwan Semiconductor Manufacturing Company would invest $100 billion to build semiconductors in the US.The world runs on computer chips.As President Trump observed more than once during his event, there’s a computer chip in everything. Your car, your computer, your phone, not to mention your stove, your fridge, your cooktop and even your high-end coffee maker.If you can’t get them, things come to a stop. And essentially there’s one supplier — Taiwan, which makes more than two thirds of the total world supply and where TSMC makes 90% of the world’s advanced chips. (The US was once a world leader in chip manufacture; thanks to offshoring, it today represents a mere 10% of global production.)Why does this matter?I well remember in the 1970s, reporting on the Canadian navy’s dependence upon obsolete radar equipment. The story was that at the height of the Cold War when transistor technology was the latest, best, thing, the navy’s radar sets still required old-style vacuum tubes of the kind that made radios work in the 1930s — and that by then, could only be sourced in Warsaw Pact countries.Luckily, we didn’t have to fight Poland.However, China regards Taiwan as a renegade province and its declared objective is to return it to the Chinese fold.The risk to the West hardly needs explanation. Weaponry also runs on computer chipsIf the West loses Taiwan to China and with it unlimited access to its semi-conductor production, we no doubt can get by without the Nespresso machine.However, no more ‘arsenal of democracy.’ For, the US ability to build the complex weapons necessary to fight on land, sea, air and these days in space, depends upon semi-conductors — many of which are made in Taiwan. If the PRC is in a position to cut off supply, the ability of all western armed forces to replace expended munitions — not just those of the US — will be wiped out instantly.We had a taste of what this was like during the COVID crisis: Your windscreen wipers quit but you were told that as the supply chain was stalled, there was nothing to be done for six months. Or maybe a year. It was inconvenient.But in a tense international stand off, it goes beyond inconvenient, doesn’t it?Trump would not be the first US president to be fully apprised of the situation. It is inconceivable that Bush, Obama and Biden were not informed.However, Trump is the first who seems ready to do something about it. Sensitivities being what they are, this is not a good time for a Canadian publication to applaud the American president, nor the threat of tariffs he employed to persuade TSMS to relocate some of its production inside the US. Notwithstanding, in a world that is getting more dangerous by the week, the wisdom of this goes far beyond 'good-paying jobs' in Arizona. Should the West ever lose Taiwan to China and with it unlimited access to Taiwan's semi-conductor production, it is effectively disarmed — there are indeed, computer chips in everything.This was a smart move.

HANNAFORD: A moment when tariffs made sense for everybody

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