People who voted for Trump because they want lower prices are in for sticker shock.
— George Takei (@georgetakei.bsky.social) November 19, 2024 at 11:33 PM
Trump’s True Believers, of course, are gonna fight this reality every inch of the way!
Trump: Foreign countries pay tariffs. Customers don't.
American retailers, now including the biggest retailer: Customers are going to pay the costs of these tariffs. https://t.co/OI1u3pXboB
— James Surowiecki (@JamesSurowiecki) November 19, 2024
Of any company on earth, none is more equipped to move their supply chains out of China, and the fact WMT can't/won't tells you what a brilliant idea these tariffs are
— The okayest poster there is (@ok_post_guy) November 19, 2024
No, their whole business model relies on ruthlessly efficient supply chains and finding the lowest cost vendors possible. They have an army of sourcing agents, etc that could be deployed to finding new suppliers. Nobody has more resources for this than WMT
— The okayest poster there is (@ok_post_guy) November 19, 2024
We absolutely know what the actual cost of goods is for Walmart, they're a public company and are required to disclose it. They made 23.7% gross margins, and an operating margin of 4.2%
Increasing COGS 40-60% would obliterate their margins, even if only on 1/3 of their merch https://t.co/6AGi9CXtKk pic.twitter.com/HMdrczrTPH
— The okayest poster there is (@ok_post_guy) November 22, 2024
Sorry (not sorry), WalMart customers!
Walmart CFO to CNBC: Look, as we have said before, our goal is to be the low price leader…but increased tariffs will increase prices for our customers.
— MeidasTouch (@meidastouch.bsky.social) November 19, 2024 at 9:36 PM
trollhattan
Huh, who knew this was so complicated?
different-church-lady
Easy to solve: just blame Biden.
dmsilev
Somehow, this will be Barack Obama’s fault. Or Jimmy Carter’s.
Baud
Meh.
comrade scotts agenda of rage
@dmsilev:
Why not all of em?
Thanks Obama!
Thanks Jimmy!
Thanks Bidenomics!
coin operated
@different-church-lady:
@dmsilev:
Yup. Even when Democrats are out of power…it’s still our fault
LAO
I spend an inordinate amount of time on TikTok for a woman of my age, but FAFO tok is addictive. Really just chefs kiss.
Lobo
As Digby and others reported. Economic anxiety seems to have passed. In fact, it seems to have taken on a partisan flavor. A miraculous turnaround. What caused that after the election?
That does not mean there was a group that on a personal level still felt it.
I don’t know how to unpack it. I guess peace and prosperity was a bridge too far for some.
ArchTeryx
Not when it has to be shared with THOSE people.
artem1s
And the Stoopid burns. Because of decades of decimating US manufacturing there are no alternative suppliers, at least in the US. Even those magical ‘alternative’ suppliers are usually not actually manufacturing the good, but assembling final products (cars, appliances, etc) with parts manufactured in China.
Anything that was in short supply during the COVID lock down probably was in short supply because it had some component that at some point passes thru or came directly from China.
This is effectively going to be a tariff on everything. For instance – food – where was the starter built on the combine that harvested it?
ChristianPinko
My guess is that tariffs aren’t going to happen. I don’t think Trump actually cares about economic policy, and that “tariffs” was just a cheap applause line that he threw out because it smacks of hurting foreigners (somehow), and so the Deplorables liked it. Trump is a bully, and like all bullies, he shrinks from fights with people who can hit back. Corporate America is definitely capable of hitting back. I think Walmart’s message is just a shot across the bow to say, “Don’t do this.” If the Trump administration persists, more companies will join Walmart. Just like right-wing media forgot about immigrant caravans once the election was over, they’ll forget about tariffs; and so will the Deplorables.
comrade scotts agenda of rage
@Lobo:
The usual millions of mostly white voters who don’t necessarily consider themselves right wingers *always* come up with an excuse why they cannot join Dems in opposing facism. Or to explain away their inherent racism and misogony.
Baud called this “The Great Excusening”, a label I’ve used frequently since.
TBone
Donold will use tariffs selectively to punish those he
disfavorshates.Martin
Let us not lose sight of the landscape from the viewpoint of the corporations. Trump was promising to cut their taxes campaigning on high prices being a problem he could solve. Corporations, knowing that they completely control prices have a candidate they can control. They’ll get their tax cuts and in the process establish that they control prices, not Trump, by only after the election pointing out that tariffs will make things more expensive. Maybe they’ll have to pay a bit of a kickback, but it’ll be less than the tax cut so it’ll be a kickback the taxpayer pays for. They win on both sides.
Corporations are the enemy we need to be fighting. More specifically, investors are the enemy we need to be fighting, because from my viewpoint even the good corporate cultures that past CEOs have established to keep them in good PR standing with customers is falling everywhere in response to investor pressure. Intel and Boeing, once kingmakers of the US economy are both failing, possibly irreversibly, and due to the same disease of propping up busted shit to keep investors happy.
trollhattan
@Lobo: Heck, in the last two weeks gasoline has magically dropped about forty cents. Not that I’m inferring any hijinks on the part of the Western Petroleum Association and its members, but they sure put the squeeze on on October.
Steve LaBonne
@TBone: Also to solicit bribes / protection money.
Chris Johnson
Wild that people who are entirely in favor of WalMart are like ‘oh yeah, they’ll be fine, they have like 75% margins’. Oh no they don’t. They compete with Amazon. Point taken that nobody has a better sourcing department, though. Doesn’t mean that will save them, but they put enormous pressure on suppliers and if this DID mean domestic sourcing would be cheaper, they’d be all over that. But where are they going to find entire supply lines from inside the USA, in 2025? There won’t be workers.
bbleh
There’s also a good deal of angst on various social media (TikTok included) as people — especially younger ones — are finding out that the evil Obamacare that Republicans will righteously destroy *IS* the ACA, which they happen to rely on and actually like.
But this will come and go after a few more trips around the goldfish bowl, mostly because — as noted above — “Obamacare” and “tariffs” and “the price of eggs” are proxy issues and triggers. They have no idea how tariffs will affect them, or what Obamacare is, or what drives the price of eggs, but if they HEAR the words or SEE a price they think is high, it triggers their tribal emotions.
I hear a lot about how Dems need to come up with “messaging” and “policies” that will “reach out” to these folks, but honestly I don’t know whether there IS any reaching them, other than perhaps by bombarding them relentlessly with propaganda that just beats something into their heads. That seems to be how talk radio and Fox have done it.
Martin
@Lobo: Yeah, but this is not unique to this moment. Democrats did the exact same thing when Biden won.
Our views on the economy are neither objective or in the moment as everyone keeps trying to cast them as. They are relative and projected into the future. It doesn’t matter if inflation is 3% if your neighbor is getting ahead faster than you – in that case you are falling behind. The cost delta from a Honda if that was the baseline for keeping up with the Jones 5 years ago to a Mercedes to keep up with them now isn’t inflation from the governments perspective, but it from the publics perspective. Standards of living change, and we don’t put the modern cost of having to own a smartphone to function in the modern world in a different bucket than the rising costs of eggs. I’m spending more, and that inflation.
If we believe that an incoming Biden administration will enact policies that will make our future selves happier, then our economic anxiety to some degree goes away, even though our economic reality is exactly the same.
Don’t turn this into some conspiracy theory, when it’s just how all humans work.
different-church-lady
@Chris Johnson:
Especially after Trump is done deporting them all.
Commenting at Balloon Juice since 1937
Sorry about raising our prices . I meant to tell you earlier about Trump’s tariffs but I really needed a tax cut.
Bill Arnold
@TBone:
I expect that if there are broader tariffs, he’ll also sell carve-outs.
That is, for Mr. Trump, “hates” is often situational.
trollhattan
Friday counts for the contested California House seats:
District 13 Gray (D) 101,514/ 49.9%; Duarte (R) 101,824/ 50.1%
District 45 Tran (D) 158,576/ 50.1%; Steel (R) 156,096/ 49.9%
https://electionresults.sos.ca.gov/returns/us-rep/district/all
Trivia Man
Hot take : he will only appoint cabinet members who have easy names. So far one has 8 letters, 2 have 7. And nothing “complicated.”
Melancholy Jaques
The cult members will not care. Trump screwed soybean farmers with his stupid trade war with China and even before they got any free-money relief, they stood by him. “He must know what he is doing,” was the typical response.
Lobo
@Lobo: Here is an answer from Digby: What reaches them is the MEG economy (the price of milk, eggs, and gas). On those atmospherics and on tribal fidelity they cast their ballots. If they cast their ballots
different-church-lady
@Lobo: yet they still drive $40,000 dollar vehicles.
JCJ
@Lobo: The Onion got this when Bush the Lesser was inaugurated – Our Long National Nightmare of Peace and Prosperity Is Over
https://theonion.com/bush-our-long-national-nightmare-of-peace-and-prosperi-1819565882/
different-church-lady
@JCJ: Nailed it with that one.
zhena gogolia
@ChristianPinko: Love your nym
realbtl
I’m convinced this whole tariff thing is what I’ve started to call a “Gaetz.” Something outlandish to take the media’s attention from the stuff they want hidden.
Bill Arnold
@bbleh:
Not sure about that with tariffs. Mr. Trump said that it is “the most beautiful word”, or similar, many (or at least several) times during rallies. It might be difficult to dislodge from (what remains of) his mind. Also, tariffs are something he can do as POTUS, without interference from Congress or the courts.
(Stealing that quoted phrase!)
bbleh
@Bill Arnold: yeah I’m actually worried HE might stick with it, but I don’t think any understanding of what tariffs actually are, or how they will affect the availability or prices of consumer goods, will stick with the broader polity. I think when they heard “tariffs” they heard “thing to whack the sneaky Chinese who are stealing our jobs and money,” not “economic tool to make domestic industry more competitive against imports (but that often raises prices),” and even if they sorta understand the latter now, they won’t for long, and they won’t connect future price increases to tariffs; more likely it’ll just be the fault of the sneaky Chinese again.
Geminid
@trollhattan: I’ve noticed that California’s Central Valley Districts like the 13th have markedy lower turnout than the others. Derek Tran’s 45th CD had 100,000 more voters than Adam Gray’s 13th. Republican Rep. David Valadeo’s district further down the Valley was similar.
A lot of the disparity is probably due to the residents who can’t vote because they’re not citizens, but Democrats could also be leaving some votes on the table. Maybe a California jackal can shed some light on the matter.
Sister Machine Gun of Quiet Harmony
@Bill Arnold: He will enact the Tariffs. He will get a ton of pushback. He will rescind them, and fire someone in his administration over it. Prices will come back down. Then voters will memory-hole the whole thing.
schrodingers_cat
What irritates me most about this election is the pointless debate over issues settled long ago like vaccines and tariffs. The stupidest people have been elected and they are going to destroy everything.
How is the stuff that is taught in intro college classes even up for a fucking debate. I just can’t with the stupid.
Chris Johnson
@Bill Arnold: And it damages the economy, and Americans. Since he works for Putin along with his whole MAGA faction, it’s on them to destroy America to sub-Soviet levels of collapse and poverty.
This will not be popular with ALL the Republicans, but then that’s why we have Thune rather than Rick Scott, and that’s why Gaetz apparently had to back down. People in Congress do know the score and they only back that play if they are exempted from the shit sandwich. They’re not exempt.
beckya57
This coming year is going to be one long FAFO exercise.
Nukular Biskits
Evenin’, folks.
As always:
gene108
@ChristianPinko:
In Trump’s first term he did increase tariffs. He also issued carve outs for certain companies.
Also, why do people think Trump lies about everything? He has been extremely honest about hating non-white immigrants, thinking other countries pay tariffs, wanting more police brutality, etc. He’s never changed his stance on these and a few other issues in a decade of public life.
Jackie
I really hope grocery and retail stores put signs up saying “Due to Trump tariffs we’ve had to increase prices accordingly” or similar wording.
danielx
@bbleh:
A large percentage of American voters are, shall we say, factually impaired, complete dumb fucks, or both.
Who knew?
Gretchen
@ChristianPinko: Why wouldn’t tariffs happen? They did last time and really hurt Kansas farmers, but Rs here won’t oppose Dear Leader’s plan. My state rep, from the Kansas City Star:
WaterGirl
Hey Omnes, check your spam filter.
Gretchen
USA Today thought an increase in car sales after the election indicated confidence in Trump. Not here. We immediately bought a new car the next week, choosing one that was already on the lot, because of fear of tariffs and because we remember that lot being absolutely empty of cars for sale in 2021 because of disrupted supply chains. We knew a young couple who moved to NY and sold their used car for a large premium because cars were so unavailable then.
I was also interested in a divorce lawyer who said that her divorce filings were way up just after the election.
Gretchen
@schrodingers_cat: Agreed. Basic competence used to be required but there seems to be an actual preference for stupidity now.
I’m glad to see you’re still here. Is your mother in law still visiting?
Baud
@Gretchen:
I thought you were about to reveal some personal information for a moment.
trollhattan
@Geminid: Interesting. Might well be an SJ Valley thing, it being predominantly agricultural.
Ohio Mom
@Gretchen: We started comparison shopping washers and dryers for the same reason. I’m going to be annoyed if my little contribution to the economy is used to boost Trump.
Barbara
@schrodingers_cat: It’s not quite as bad as a game of CandyLand where every other turn sends you back down the chute but it’s close enough.
bbleh
@Nukular Biskits:
“But ma’am, the No-Face-Eating Party repeatedly warned about the leopards.”
[mood shifts abruptly, hisses angrily] “Oh those No-Face-Eaters, why they just HATE America! I’d NEVER vote for THEM!!”
mrmoshpotato
What hilariously stupid conspiracy theories will the Dump-humpers pull out of their fascist asses to keep from admitting that they voted to shoot themselves in the crotch?
kindness
@Geminid: Modesto here. This is more or less red California. Large numbers don’t vote here. And it isn’t difficulty voting, it’s more voting isn’t important to them. They aren’t Democrats. They aren’t Republicans. Mostly they are poor and ignorant. They might be unhappy being poor but they are happy being ignorant and do everything they can to stay that way. Honestly, we’re better off many of these folks sit it out.
Sister Machine Gun of Quiet Harmony
You guys act like Trump is going to stick with tariffs when his voters start complaining about them. He won’t. He isn’t like us. He isn’t ideological. He’ll just jump from policy to policy and jettison the ones that tick off his voters. It will create chaos, but they don’t care. It will be, ‘At least he’s doing something’ 24-7.
Our people don’t do that. They pass policy for ideological reasons, and if it winds up being unpopular we stick with it because we think it will be better for the country in the long run. Trump’s just going to dance around catering to his supporters and his own whims.
Jackie
O/T but important:
Kemp doesn’t want us knowing how many women and teenagers died due to his inhumane abortion laws.
mrmoshpotato
@different-church-lady:
I thought these coming tariffs were Obummer fault! Or can we blame Hillary’s emails?
Geminid
@trollhattan: So the San Joaquin Valley refers to the whole thing. I wasn’t sure.
I knew enough not to call you folks “Cali jackals.” But I was tempted.
trollhattan
@Geminid:
Technically, Central is the combined SJ and Sacramento Valleys. Those are defined by the rivers that drain them and they meet at the Delta.
ETA, calling us Cali would probably be putting the cartel before the horse. :-P
Geminid
@kindness: It seems like Democrats might make targeted registration efforts to good effect. It wouldn’t take much to flip Valadeo’s seat in 2026, and Duarte’s if he wins this year.
But I have no practical experience in this area, and I live 2500 miles away.
Nukular Biskits
Since this is an open thread, was this the longest week of the year or is it just me?
Baud
@Nukular Biskits:
Agree.
oldgold
I thought Adam Smith buried the basic tenets of mercantilism 249 years ago in “An Inquiry into the Nature and Causes of the Wealth of Nations.”
If Adam Smith failed in that endeavor, Smoot – Hawley should have finished the job 90 some years ago.
Rusty
This will be easy-peasy for the right. Companies had to raise their prices because of the tariffs, so to help them lower prices we need to cut their taxes. Own right wing policy justifies the other. Conservatism is never wrong, it just needs to be ever more extreme to work.
trollhattan
Our cyclone didn’t exactly bomb us like in the PNW but this afternoon it’s just pissing rain. Nearly an inch in about five hours, and rain forecast daily through Wednesday.
Glug.
Nukular Biskits
@Baud:
It’s been a long week at work for me, to be sure.
But seeing the flood of absolute adulatory bullshit about Trump in our supposedly liberal media this past week or so hasn’t helped.
Baud
@Rusty:
Nice try but too late. Trump already selected a Treasury Secretary.
mrmoshpotato
Bob Woodward, is that you? Mags?
cain
Trump voters are not even paying attention. To them it’s already a solved problem.
cain
@trollhattan:
Apparently portland is setting up us the bomb. We need to make our time.
kindness
@Geminid: I live on the edge of town. After the census a tiny piece of the town (200,000+ people) got redistricted to a giant district that includes a lot of Sierra Nevada towns. Real red California. So far I’ve been really impressed Adam is 310 votes out from the Republican. Sure seemed to me it was a give away making one district red and corralling all those votes into it. The non-voters? It just isn’t a part of their world. They ignore much of it. I say I’m happy many of them don’t vote because I know Fox News is on in many of their homes.
mrmoshpotato
@Sister Machine Gun of Quiet Harmony:
Mainstream media will memory hole it too.
Because they love some orange cock slapping them in the face. Just ask Joe, Mika, and Chuck.
cain
@Rusty:
oh, they’ll take the tax cut, but they aren’t going to lower their prices. It will be up to the Trump administration to figure out how to put lipstick on a pig.
He’s going to go out there and use his yoyo dinky hands declare it’s working already, it’s working. Nobody has never seen such success before. You’ll see. Amazing!
mrmoshpotato
@cain: LOL! Nice.
Dan B
@Jackie: Christianists worship purity so they only want to hear about “innocent babies” saved. I guess theses women are unsure because they had sex, or something. Ah, Christian “love”!
YY_Sima Qian
While Trump’s tariff proposals (for the PRC or the broad based ones) are terrible economic policy, Biden kept almost all of the tariffs that Trump levied against the U.S.’ trade partners, especially the PRC. Trump completely broke the basic functioning of the WTO, Biden kept it broken. Let’s not get into the R habit of only becoming indignant at ill conceived policies when the opposition does them. Dems correctly ran against the Trump tariffs 1.0 in 2020, then promptly forgot about them when Biden decided to keep almost all of them. But those tariffs that Biden kept sure didn’t help w/ inflation, did it? (The negative impact was on the margins, but negative nonetheless.)
Tariffs can be useful tools in the industrial policy box, helping to provide a protective shelter for important domestic industries survive the nascent stage, & incentivize inbound investment by foreign industrial leaders. However, for them to be effective, they need to be targeted, paired w/ industrial policy that promote the development of the targeted sectors & competition in those sectors that do not designate winners, & have clear sunset dates. Otherwise, we end up with consumers subsidizing the protected industries that can only survive in the shielded “Galapagos” environment behind tariff walls, uncompetitive internationally.
Biden’s CHIPS & IRA are doing some of that, but have also undermined their impact by subordinating industrial policy to Great Power Competition w/ the PRC & tech decoupling from the PRC. The PRC is the dominant market for semiconductors & clean tech, & the dominant leaders in virtually every aspect of clean tech. Forgoing exports to the PRC & disincentivize inbound investment from Chinese industry leaders do not help w/ the goal of industrial development in the U.S.
The 1st round of Trump (& Biden) tariffs failed in its objects of reducing dependence on PRC supply chains & restoring manufacturing. All they achieved was to put intermediaries between Chinese suppliers & US consumers, via more opaque & more brittle supply chains, & incentivized tariff avoidance/evasion practices at a massive scale by U.S. importers.
Realistically, a new round of massive tariff hikes will result in immediate & aggressive currency depreciation by the U.S.’ trade partners, starting w/ the PRC. PRC exports will continue to be routed through 3rd countries w/ relatively lower tariffs by transshipment/relabeling/simple final assembly. US importers will continue to pursue avoidance/evasion tactics, & bribe the Trump Administration to avoid becoming targets of enforcement. However, US exports (outside of weapons) will be hammered by retaliations.
By all accounts the PRC is now in much better position to weather & counter a 2nd round of tariffs. While the U.S. has been trying to “de-risk” from the PRC, the PRC has been actually been making progress “de-risking” from U.S. tech. & supplied in critical sectors, forced to do so by the export controls imposed by Trump & significantly ramped up by Biden (i.e. the tech war). Over the past 4 years the PRC has also built a broad & sophisticated tool kit of sanctions & export controls for retaliation (so far mostly held as threat in being rather than utilized), mirroring that of the U.S.
As for WalMart, if you take a look at the labels, I think you will find more & more of the relatively simple cheap widgets & pieces of clothing are now made in Vietnam, Cambodia & Bangladesh. Chinese labor hasn’t been cheap relatively to other developing economies for more than a decade, & the Taiwanese, Hong Konger & Mainland Chinese businesses that do labor intensive export processing have been decamping since the start of the trade war.
Martin
@trollhattan: With rare exception, late ballots in CA lean blue. Katie Porter never had a lead on Election Day. At least once she was 3 points back, and with each batch of mail in processed she clawed that gap back a little more.
I wasn’t shocked that Min won as much as I was surprised at how close to the election it was called. Given he recently had a DUI, and isn’t remotely as engaging as Porter, I’m surprised at how well he did.
lowtechcyclist
@Martin:
And how do we fight corporations now? In six weeks, the GOP will control both houses of Congress, and the White House two and a half weeks after that. They already control the Supreme Court.
Maybe you’re saying “this is the battle we need to fight after we recapture our government,” rather than “we need to prioritize this battle right now,” but it’s not the way it reads.
Dan B
@trollhattan: We’re in Cyclone 2.0 today. My brother has five large trees down in his backyard. They’re at the foot of Cougar Mountain not far from the winds howling out of the Cascades.
mrmoshpotato
@Dan B:
I guessed right that neither of these women was white.
Rusty
@cain: I for a moment don’t think they will lower prices either, it will the justification for the tax cuts (permanent of.course), that’s all.
E.
@Jackie: I hate this so much, and it’s going to start happening everywhere. The shutting down of information unfavorable to their ideology.
Jackie
TCFG picks hedge-fund manager who supports his tariffs for Treasury.
Dan B
@Jackie: Bessent, the guy picked for Treasury, lives in Charleston with his husband and two kids. What’s the upshot on Chrustianist wailing and gnashing of teeth?
ChristianPinko
@Gretchen: Thank you for the information. That certainly undercuts my case. I guess I’m just worried that progressives might start to count on the idea that a huge economic downturn is on the way that will make everyone mad at Republicans and put Democrats in power. Also, I wouldn’t want to see progressives look like fools by predicting economic disaster that doesn’t materialize. Not that Democrats don’t get blamed for stuff they get right, either.
Dan B
@trollhattan: No rain from 2.0. Wind and partly cloudy. Seems like you’re getting all the rain. We had steady drizzle all night with no rain.
HeleninEire
NYC has rejected all Walmarts, so fuck’em. h/t efgoldman.
And the hilarious part is we always scream “too much traffic ” 🤣 Like a Walmart would affect traffic in NYC.
NYC is traffic all the time.
Jackie
@Dan B: This “proves” TCFG hasn’t anything against gay marriages. It’ll be interesting to see how “his” evangelicals react.
Jackie
@Dan B: If not rain; a steady drizzle of what?! 🤔
Martin
@YY_Sima Qian: yeah, Chinese labor is more expensive than Mexican labor on average.
But cheap labor isn’t what brought most manufacturing to China – it was China’s ability to scale really fucking fast. If you were trying to bring a new product to market you could shave *years* off of that process making it in China. And I can’t think of a single example where a delta in labor prices would exceed the revenue from an additional year of sales – even putting CA wages against rural Chinese ones. When CA needed PPEs after Covid, they went to BYD who have factories in state, and despite them not having experience making PPEs, they set up a factory in about 2 weeks and had their first shipment about a week later. Nobody in the US was doing that.
Musk is an enormous piece of shit, but when he set out to build a new rocket, he threw a bunch of people in a field in Texas and set them to it, and by and large that has worked well. The US outran even China on reusable rockets. ULA is still rejecting the idea, as is ESA, even though they have been fantastically successful for nearly a decade now.
If China is faster than Vietnam and India and Bangladesh, they’ll hold onto that business, even if their wages reach US levels. I’ve never seen any effort to correct on this viewpoint even when major US companies like Apple have been exceedingly clear that speed is why they went to China, not cost. Even when Obama asked Jobs directly, cost wasn’t the issue – the issue is that it’d take a decade to train up the workforce in the US at the needed scale that China has already trained.
Omnes Omnibus
@Jackie: Good god, why would you ask that question? Dan B might answer.
Geminid
@Martin: I thought that if David Min lost he could get work promoting a ride share company: “Take it from me. You’ll be better off calling Uber”
I’m glad though that Min made it to Congress. We did not elect that many new Democratic Representatives this year, certainly not compared to the 60 in the Class of 2018. But the ones I’ve seen look solid.
Dan B
@Jackie: It was last night before Cyclone 2.0. Blue skies this morning with no wind followed by strong gusts from the southeast but no rain. The Cyclone passed by in the afternoon and evening. It looks like rain to the east as the wind dies down.
prostratedragon
Derek Guy sometimes talks about the clothing manufacturing industry. In this thread Guy starts out on the question of quality goods, but also discusses international supply and assembly chaind.
Dan B
The prospective cabinet now has a Project 2025 author for OMB whose colleague wants gay marriage (Obergefell) overturned and the “Gay married” head of Treasury. Drama?
YY_Sima Qian
@Martin: The truly labor intensive studf, such as textiles, mass market clothing, mass market footwear, toys, have been moving out of the PRC for the past decade, accelerated by the trade war, & encouraged by the PRC government.
Placing the Global South countries beteeen PRC suppliers & Western consumers had actually had the effect of enmeshing these countries more deeply into the Sino-centric global supply chains, far more quickly than supply chains can shift from the PRC to these countries in any meaningful way.
SpaceX is amazing, truly disrupting the space launch & satellite communications industries. Chinese players (state owned & quasi-private) are 10 years behind, but making steady progress toward re-usability. The ULA & the ESA remain nowhere to be seen on this front.
Barry
@LAO: “I spend an inordinate amount of time on TikTok for a woman of my age, but FAFO tok is addictive. Really just chefs kiss.”
I have to ration it; it’s like a huge container of far-too-sweet candy.
It tastes sooo good.
Sister Golden Bear
@Nukular Biskits: Wednesday was the longest year of the month.
YY_Sima Qian
@Martin: Boeing has f*cked the US’ competitive advantage in civilian aviation. Intel has f*cker the U.S.’ competitive advantage in semiconductor fabrication. The Detroit Big Three has f*ck the U.S.’ competitive advantage in civilian auto (outside of the pick up truck & their SUV cousins). The U.S. remains leaders in semiconductor design & equipment, but cutting the largest, fastest growing & most dynamic/competitive market through export controls weakens their global leadership positions, reduces their revenue streams that they need to fund R&D to stay ahead, & encourages the development of Chinese competitors.
The PRC is probably years away from reaching the leading edge in semiconductor fabrication, but it’ll get here, far too much resources, far too much existing & growing industrial capacity, & far too much domestic demand. The advantages conferred by leading edge nodes are not longer decisive in most applications, anyway (possibly even in AI, since we seem to be running into scaling constraints).
Soprano2
@trollhattan: Actually here gas has risen $0.30/gal since election day – it was $2.29/gal on Election Day.
Martin
@lowtechcyclist: There is no rhetorical, at least organized rhetorical fight being waged against corporations.
Prices in 2023 didn’t go up because the cost of goods and labor went up. Goods and labor were about 15% of the cost increase. The other 85% were increased profits. Democrats didn’t wage a campaign to fix that. They barely called it out at all.
Look, Republicans are really good at latching onto problems that divide Democrats – prices, immigration (depending on where you live) etc. Democrats aren’t good at that apart from abortion which only recently fell in our lap – but Republican voters aren’t generally pro-corporation or pro-billionaire. Some are, but many aren’t – certainly enough of them aren’t that if you could get them to not vote GOP, we’d win. But Democrats don’t wage a political campaign to wedge Republicans on corporations because apart from Bernie (popular with Trump voters) and AOC (who held her vote share while Trump picked up vote in her district) and a few others then democrats are very selective when they speak out.
Joe was quite good supporting labor rhetorically, but there wasn’t a lot of action against management or owners or investor to match that.
Frank Wilhoit
Walmart “finding” new suppliers (“domestic” is assumed) would involve starting those suppliers — and their suppliers. Maybe they’ve got the money to do that, and maybe they can even hire the skill (c’mon, we’re spitballing here), but what they won’t have is any incentive to delay the return on those investments by undercutting the new higher prices on imports by more than just enough to capture the price-sensitive demand.
Once the (very bad) reaction to the tariffs sets in, the obvious play will be to try to backtrack, by ostentatiously “negotiating” a “new” bilateral trade agreement (that does not actually change anything) with China or whomever, and use that as cover to scrap the tariffs. But that won’t work, because, once any tariffs are in place, the resulting prices will become the new normal, and no actor will have any incentive to undercut them by more than a symbolic epsilon.
Barry
I apologize if this has been covered above, but from what I hear, Trump would have *massive* discretionary power in tailoring them, and granting exemptions. This would mean truly massive bribes for him.
YY_Sima Qian
@Frank Wilhoit: On your last line, that would be the “sellers’ inflation” or “greedflation”.
Martin
@YY_Sima Qian: I’m not convinced China will get there. The west is there only due to a truly international coalition – Japan, Netherlands, the US, Taiwan, South Korea, etc.
There is not a straight line from any point in semiconductors to leading edge. Intel guessed wrong when they were best in the world and it set them back a decade. There are some engineering challenges that are so complex that the source of the solution is unpredictable and semiconductors are one of those. Yes, China can be a fast follower, and there’s a LOT of money in slightly old nodes, but going from there to novel ideas is non-deterministic. Maybe you get there, maybe you don’t. Nobody in the industry expect the current leaders to remain the current leaders for this reason.
The other advantage the western alliance has is that it is ungodly expensive. Each new node, effectively the annual advance for the industry is $50B? And that increases annually. That doesn’t advance your scale, that’s to take what you have now one step forward. What Intel used to be able to afford in their R&D budget, when Apple then were able to afford out of theirs (Apple spends more on silicon than Intel does), and now Apple can’t afford it and it’s a coalition of US customers – Apple, Qualcomm, AMD, Nvidia, and Intel as it happens.
Samsung can compete because they are participants in this open system – they can pick and choose among the winners apart from what’s happening within TSMC. If the west are determined to freeze China out, I don’t think China can do that lift. China currently are minor players in the industry despite years of trying to get in, mostly because the costs are so high and China is determined to see success in a specific place while the west is less constrained there. Apple jumped from Intel and Samsung to TSMC and is perfectly happy to jump back if the other companies figure it out ahead of TSMC. They aren’t beholden to the winner being in this country, etc. Even if China invaded Taiwan, I think we’d have a 2 year disruption in volume, but Samsung or Intel (as a consortium entity with funding from US customers) would simply replace the tech, build out the capacity, and we’d be right back where we were before. China would have captured tech they didn’t have but not necessarily the expertise needed to move it forward. The really, really hard engineering doesn’t happen in Taiwan, it happens in Amsterdam. And the difficult software doesn’t happen in Taiwan, it happens in California. Industrial espionage can only get them so far here.
By and large, China has failed to replicate what Silicon Valley does because it vastly underfunds the part of the endeavor needed, and it’s unlikely that China will learn that lesson in the narrow case of semiconductors. Again, that doesn’t mean they can’t match the less advanced stuff, but being competitive on cutting edge silicon is so incredibly hard that I doubt they can replicate that – at least reliably.
I don’t have this view about any other industry – because every other industry I can think of off hand is pretty deterministic, including reusable rockets. Once you see how to do it, it’s pretty easy to replicate and know how to move forward. Competing with Starship isn’t hard, provided you have the cash and skilled labor needed. But it’s not obvious how to get in front of ASML and it’s a level of expertise that is extremely difficult to acquire.
Gretchen
@Ohio Mom: Our fridge failed in 2021, and we had to get a temporary fix because there was a month’s long wait for a new one.
@Baud: no personal news but the new car, thankfully
kalakal
@schrodingers_cat:
With you 100% on this. It is literally beyond me
NotMax
Corollary: One can lower the quality of the products or reduce the size of the packaging only so much while attempting to keep prices near the same.
YY_Sima Qian
@Martin: You are describing the narrow specialization that is the consequence of 3 decades of nearly unfettered globalization, which is the most financially efficient way of organizing global supply chains for semiconductors. That does not mean it is the only way to organize, U.S. export controls have realigned the incentive structures for Chinese players away from financial efficiency. & the days of unfettered globalization is gone, or the U.S. would not have both enticed & coerced TSMC & Samsung to build advanced node fabs in the U.S.
Coming out of the Cold War, the U.S. could have had a fully indigenous semiconductor supply chain if that is what it wanted, from design to fab to equipment to materials. Right now, the PRC is the only country that has a fully domestic stack down to 45 nm, from the equipment, to the design software, to the raw materials, to the fabrication. It’s still a ways to domestic EUV and fully domestic 7 nm & below, but the advantage conferred by 2 nm vs. 7 nm is not as decisive as 14 nm vs. 90 nm.
Manufacturing output & value added for the PRC is almost that of the U.S. + the EU combined, or larger than the G7 combined. If you look beyond monetary aggregate values & instead look at the quantity of goods, the PRC often accounts for more than the rest of the world combined. There is often much greater competition in the Chinese market, between domestic & multinational players, while the mature developed markets have settled into comfortable monopolies & oligopolies, increasingly protected by tariffs walls from new entrances outside of the West.
Your impression that the PRC is only capable of being a fast follower and unable to replicate what SV does is basically 5 – 10 years out of date. The PRC is widely assessed to be in the lead (technologically, not just scale) for virtually every clean energy, nuclear, EVs, shipbuilding, high speed rail, telecommunications, construction equipment, fintech; it is at or very close to the leading edge (alongside the U.S. & other Western countries) on consumer electronics, quantum tech, biotech, automation, AI, internet platforms, space launch & exploration (outside of reusability), weapons platforms & munitions; it is closing fast on pharmaceuticals, advanced materials, robotics & precision machining. Leading edge semiconductors & civilian aviation are basically the only sectors where the PRC is only catching up at a moderate pace.
All of these are downstream of the PRC having by far the largest & most competitive market, the largest & most consistent government support, an economic structure that does not favor maximizing financial returns (which tends to discourage competition), & the largest & still rapidly increasing STEM workforce. The PRC can catch up more quickly in sectors where product lifecycles are shorter, which is why civilian aviation & semiconductor fab equipment will take so long.
The 0 to 1 theoretical breakthroughs often still happen in the U.S., because of the enduring strengths of institutions of higher learning (but most of the advances are in the public domain). The 1 to 10 advances in application the PRC is now competitive. The 10 to 1000 industrialization & commercialization, the PRC has pretty decisive advantages. Organizations such as ITIF (on the application & industrial scaling aspects), ASPI (the Aussie one) & Nature (on the fundamental & applied research aspects) have maintained multi-year/decades of studies & indices that strongly show these trends. There are clear limitations to such indices, but they certainly do not tell a story of the PRC only being a fast follower.
Meanwhile, SV is returning to its roots sucking on the tit of US defense spending, that is part of the reason why the reactionary techbro culture is ascendant.
YY_Sima Qian
@Martin: Addendum: everything we are discussion are applied sciences, where the breakthroughs have been made years/decades ago & pretty well understood. & in applied sciences, there are generally more tha. One way to reach any given destination.
& TSMC is now basically a monopoly, Samsung is no longer competitive at 5 nm or below, & Intel is on the verge of bankruptcy.
Miss Bianca
@LAO: I don’t do TikTok, but the Reddit Leopards Eating Faces account is my jam currently.
YY_Sima Qian
@Martin: Here is perhaps the most comprehensive study across industries by ITIF:
Since the study is a snapshot survey cross industries focused on commercialization at scale, I would consider thirst to be slightly trailing indicators. For examples, most industry experts would place Chinese players clearly in the lead on batteries, including future battery tech like Sodium ion batteries or solid state batteries.
randy khan
I’ve already seen right-wing memes going around about how those of us who didn’t vote for Trump will thank them for the lower prices that are coming after he’s inaugurated. It actually talks about lower prices, as if that’s at all likely without a massive recession.
Martin
@YY_Sima Qian: Yeah, with limited participants in the market, prices rarely drop when cost relief comes. In some industries like tech, that’s just how things work – shit gets cheaper all the time because of the nature of manufacturing goods that have extremely low marginal costs – global scale drives down prices. So some industries are better than others.
The center point of that in tech is Apple who build to a price point and value-add to justify the price point. As such the iMac was introduced in 1998 for $1299 and today, 26 year later, the base price for an iMac is $1299. It’s gotten more affordable in the context of inflation and gotten immeasurably better in terms of value for money, but it never got ‘cheaper’ at least in any material sense – small fluctuations from year to year. On either side of them you have parts of the industry that do get cheaper and parts that don’t or who fluctuate a lot. Apple is up there with Arizona Iced Tea in terms of price stability. But that has a lot do with them having very long time horizons for profitability and being willing to take a smaller margin this year and make up for it later. There’s not a lot of pressure for costs overtaking price.
In a retail setting it’s a lot different. To start with retail has a baseline markup of 100%. It varies a lot by what kind of retail, but if you buy sometime in a store for $10, they probably paid about $5 for it. The other $5 covers the cost of the store – rent, mechanical, labor, profits, breakage, etc. What that means is that when they get an efficiency on the supplier side, it doesn’t have as much effect on the price to the consumer as you might think. A cheaper widget has little impact on the cost of operating the store. And for large chains like Walmart, a drop in price has a cost to implement – getting all of your stores to put new signs on that item. If the efficiency is small enough, it’s just not worth the effort.
It’s why Amazon is hard to compete with. They don’t have menu costs (cost to change the price of a good), because it’s one store, not 1000. It’s a database update and that’s it – not only can they change it every 5 minutes, they can make it different for different customers. And their overhead costs are similarly easier to cover than retail because they’re online. Even their shipping costs are shifting from marginal to fixed. If the Amazon driver goes down your street every day, the cost to do that is the same regardless of how many packages are on the truck. Get your volume high enough that they drive every street and your costs level out and every package beyond that is nearly free to deliver – and that’s pretty close to where Amazon is now. So Amazon has more opportunity to compete on price than traditional retailers do.
But there’s a psychology element here as well. Everyone in the industry knows that consumers respond to increases in price, but not decreases. One reason for that is that the increase is always seen – the reaction is when you go into buy a burger and it’s $5 instead of $4. And if you protest, go to a different place, stop eating out whatever, you won’t necessarily see a drop back to $4 because you aren’t there to see it. So, a lot of places ride out the loss of business, know that in time inflation will drive competitors up to $5, and they’ll get their customers back because $5 is now the ‘correct’ price. And if you can blame it on the guy in the WH, you might not lose customers at all (there’s your greedflation).
So drops in prices don’t ‘undo’ the increase. They maybe undo half of it. So if you get a drop in costs, most of the time your best play is to sit on the drop. Maybe use it to delay raising prices in the future. In really price sensitive markets where there is a lot of comparison shopping it might work out (but if you are going to comparison price – who are you most likely to compare to? Amazon, because their price is so easy to get to), but there just isn’t a lot of that out there. What you might do is use your drop in cost to do a ‘buy one get a 2nd at half price’ kind of thing. There’s a marginal savings to the consumer, but only if you give the store more money. The consumer feels like they’re getting a deal but you don’t have to commit to a price drop and you won’t be punished once you stop the promotion.
In the current environment, though, if investors get wind that you can boost margins by half a percent, they want that. So they’ll demand you keep the cost savings and give it to them. Entire industries in the US aren’t driven by profits but by profit margins. Railroads will reject profitable deliveries because investors want margins to go up – and they’ll take less business to meet that demand. It’s the most busted thing.
YY_Sima Qian
@Martin: Here is the latest of the Australian Strategic Policy Institute’s Critical Technologies tracker:
This annual survey focuses on fundamental & applied research, so I would consider it leading indicator.
Furthermore, ASPI is very hawkish on China, & has played large role in promoting Australia’s strategic alignment w/ the U.S. against the PRC, at least under the previous conservative government in Australia. So, the report should be read w/ an eye out for threat inflation. I don’t think the PRC is as dominant in applied research as the survey (or the Nature Index for that matter) might suggest. OTOH, it is a long running series (far predating the current era of Great Power Competition), w/ transparent, consistent & reasonable methodology, so the trend it describes should be accurate.
Martin
@YY_Sima Qian: Well, Samsung is fabbing for Qualcomm at 4nm now. Intel is nearly bankrupt but the US isn’t going to let their only domestic foundry go under because they’ll need them for ITAR purposes. Worst case they’re going to pull the customers together to jointly own the foundry operations under a ULA type arrangement. That doesn’t ensure that they’re competitive leading edge, but it would likely keep them close.
YY_Sima Qian
@Martin: Great writing up of the sales dynamics! Thanks! Quite right that the financial incentive these days is in profit margin maximization, & not even profit maximization.
Apple operates basically in a duopoly w/ Samsung in the U.S. mobile phone market. In China, it has had to slash the prices of the non-Pro iPhones in face of competition from Huawei and Xiaomi to hold market share. Tesla has had to make huge price cuts in China because of the cutthroat competition in EVs & PHEV, just to make sure its market share does not fall off a cliff.
YY_Sima Qian
@Martin: TSMC’s customers don’t want a TSMC monopoly, so they are keeping Samsung in the game, but technologically Samsung has fallen behind since the 5 nm node (which was a fiasco that really hurt Samsung as a competitive foundry player). Qualcomm (& nVidia & everyone else) also has to stand in line behind Apple for each of the advancement that TSMC makes. You are right about Intel, but I am not sure it will keep pace w/ what TSMC is building in the U.S. (which will not be the latest gen per TWese regulations), even w/ government support.
Martin
@YY_Sima Qian: Whether a consortium Intel is competitive will probably be a product of how much pressure China is putting on Taiwan and the degree to which Apple feels having foundry control is important. In theory it shouldn’t be for the same reasons why Apple doesn’t feel compelled to absorb Foxconn’s functions, but there’s a lot more options in there to choose among assemblers and the foundry space is getting VERY small. Buying Intels foundry business, or even a stake in it, could allow them to make those investments in a place they can better control. TSMC has been a good partner for Apple, but if China threatens that, I could see them shifting gears. 2 years ago Apple would never have been allowed to buy that business, and now I think the feds would be okay with it provided that Apple agreed to have a customer business (something Apple doesn’t do in any other context).
IOW, if they did it it would be agains their better judgement, and because they felt the situation had gotten too risky.
Appreciate that cutting edge semiconductor is a very strange market, because it doesn’t follow the traditional adoption curve. Normally demand for leading node would be relatively small, because it’d be too expensive, but Apple artificially alters that by throwing the majority of their product line there. As a result they to some degree subsidize everyone behind them, but they get the advantage of first-mover. So it’s not really a natural market. If you took Apple away, the industry would develop quite a bit differently.
So if Apple took that investment and didn’t commit to just using Intel for their less advanced components, they would effectively force Intel to leading edge because a lot of the reason why TSMC is there is because Apple is prepaying for them to be there. TSMC wouldn’t be there without Apple. Samsung is struggling to get there because they don’t have Apple any longer. China can avoid that dynamic – they don’t have to rely on a customer to put up the cash, the government could just do that even just to subsidize them to competitiveness, but it’s not a ‘natural’ dynamic. It’s that way because Apple is a weird element in the market.
YY_Sima Qian
@Martin: Yes, all good points on Apple. Let’s just say I am fairly intimately familiar w/ the role Apple plays in its supply chain, not just semiconductors.
As an aside, even Apple is seeing diminishing returns w/ going to ever thinner line widths, & will really need new applications such as AR/VR to justify the immense expense.
Martin
@YY_Sima Qian: Yeah, they’re aware. They’re still outrunning everyone but this pace isn’t sustainable.
Apple’s bigger problem is that tech is not a large enough market to support it. They have to branch into other markets. The 5 possibilities are defense, finance, health, energy, and transportation. Finance is their strongest push, with bit in the others apart from defense. They’ll never do defense – it’d destroy the company. Well, maybe in the limited context of that Intel consortium I described.
I just learned Apple is testing silicon with Intel for the 2026 timeframe as a hedge against possible tariffs. This would be their 18A node or a refinement of that node. I’m less skeptical that Intel can be competitive in performance than I am that Intel could have the capacity for a customer like Apple (who sells more leading node chips than Intel sells on all nodes).
Ramona
@LAO: I hope that all these tales of Trump voter regret are true. Do you get the impression that they are?
sab
@Barry: As far as I can tell, the whole point of Trump tarriffs is to solicit bribes from USA companies’ management. Sort of a bidding war for who gets the least worse tarriffs. If any of them even happen.
YY_Sima Qian
@Martin: It would be monumentally stupid for Trump to place tariffs on Taiwanese semiconductors. But then the U.S. placed high tariffs on Chinese solar panels & batteries (all that’s done has been to slow the solar roll out & EV adoption in the U.S.), so…
Chris Johnson
Cool to see Martin and YY_SIma Qian getting into a wrangle on these topics: extensive information meets extensive information, in civilized wrangle :)
I don’t follow all of it but the point/counterpoint is neat :)
Another Scott
@Chris Johnson: Yup it’s an interesting discussion.
I’m tempted to jump in with thought and links, but need to walk the doggie. I will say that:
I have some nostalgia for the early days of lots of mid-sized companies battling it out in the PC space. Now, lots of giant companies are battling it out. As back in the olden days, there will be temporary winners and losers, but nobody is guaranteed to stay at the top – not Apple, not TSMC, not nVidia, not Qualcomm, not Google, not ASML, not anyone. The question, as always, is – what damage will they do to progress and the rest of the economy as they try to stay at the top?
My $0.02.
Best wishes,
Scott.
YY_Sima Qian
@Chris Johnson: I actually agree w/ Martin more than I disagree on a range of topics, but it is on the differences w/ the finer points that engaging discussions occur,
YY_Sima Qian
@Another Scott: I think sometimes Americans have lost the reference point on what a truly competitive market place looks like, many of them have become de facto monopolies or oligopolies, powerful vested interests that have influence on both political parties to protect their cozy positions.
In comparison, I have had a hard time pulling trigger on buying an EV or PHEV in China, because the prices are dropping quickly even as the tech is advancing even more quickly. A model that would have been very satisfying cost & performance wise today will feel like a rip off 6 – 12 mo. from now.
I would have just as hard a time choosing mobile phones in China, if I have not sunk tens of thousands of dollars into the Apple ecosystem (over & above the tens of thousands of dollars on the iPhone, iPad & MacBook devices themselves) over the past decade & half.
I suspect there is an opening for disruption coming up in semiconductors, which is running into hard physical limits approaching ~ 1 nm line widths. The ASML NA EUV lithography machines are getting extremely expensive, & the chips made by TSMC is getting correspondingly more expensive, since it has a near monopoly. Yet, the performance benefits of going down to 5, 3, 2 & eventually 1 nm are no longer decisive – lower power consumption & smaller form factor, sure, but are only truly important for a limited range of applications.
The one application where thinner line widths is supposed to still impart a significant advantage is in AI training, that’s why every company in the world w/ AI ambitions have been hoarding the latest NVidia GPUs (or Huawei GPUs in the case of Chinese companies under US export controls), at eye watering cost. Eric Schmidt (former CEO of Google) basically sold the Trump & Biden Administration’s on the narrative that we are on the cusp of AGI, & the US must get there 1st to enjoy a decisive & insurmountable advantage over the PRC & everyone else. That was the rationale for the ever expanding export controls on semiconductors to the PRC, not to mention USG funding & contracts to AI firms that Schmidt has invested in.
However, there are emerging signs that the models are reaching their scaling limits, having vacuumed up all the information there is to access on the internet. Exponentially higher computing power is reaching rapidly diminishing returns. Sam Altman’s fantasy of building a trillion dollar computing cluster to develop the 1st AGI will probably remain just that.
If semiconductors are approaching physical limits, & the biggest/hottest application for semiconductors is approaching scaling limits, then being at the bleeding edge no longer confers significant advantages. AI development will pivot toward specific applications, rather than “general intelligence”, & they do not need huge models w/ hundred of billions of parameters or huge clusters w/ tens of thousands of GPUs to run. Here, the PRC may indeed be advantaged, because difficult access to the latest Nvidia GPUs have already forced them down this direction, & the application space is by far the biggest in the PRC (due to the massive industries & the massive market).
Until a new disruptive technology scales & commercializes, such as optical chips or quantum computing, the game will be in design optimization (in the models & in the chips) & advanced packaging (such as chiplets & chip stacking). Here, the playing field is more open. TSMC & Japan have wisely been getting a jump in these technologies, & Chinese players (such as Huawei) are also investing heavily.
YY_Sima Qian
@Martin: Interesting comment on Apple’s need to diversify.
One example is Samsung, which is now a huge conglomerate encompassing consumer electronics, home appliances, LCD/OLED displays, semiconductors design & fabrication, & now telecom equipment. However, in my experience the different companies under Samsung, as strong as they are in each respective sector, are not always working in synergy, nor do they necessarily realize efficiencies.
Another example is Huawei, the telecom equipment vendor that then built a highly successful consumer electronics business, only to have that business kneecapped by US export controls & be forced to diversity to regain the lost revenue streams. Now, aside from the core telecom networks business, & the consumer electronics business that has substantial recovered, it now encompasses clouding computing, fibre optic cables, semiconductor design, enterprise solutions, solar (power converters), smart cockpits/self driving for civilian auto, industrial automation (in smart manufacturing & mining), & now semiconductor fabrication. These different divisions of Huawei are much better synergized IMO.
Another Scott
@YY_Sima Qian: Yup. Lots of things are going on in the silicon space. I’m still an “AI” skeptic, but time will tell – I hope the crash doesn’t destroy the world economy. 🤪 Quantum is also getting a lot of hype and more than a little investment, but time will tell there as well – there are still lots of issues in trying to bend quanta to our will, and especially in scaling. Nobody knows if that will be more than a niche in the next decade or few.
Military electronics is likely to continue to get a lot of investment for things like drone swarms and digital radar (which has lots of civilian applications too, of course).
Interesting times. We’ll see how it turns out.
Thanks.
Best wishes,
Scott.