By Cole Harrison
Here’s a number worth losing sleep over: the United States consumes roughly one-quarter of the world’s semiconductors but manufactures only about 10 percent of what it needs. Every car on every American highway, every smartphone, every piece of military hardware protecting this country – all of it runs on chips built thousands of miles away. Most of them in Taiwan. You know, the island that Communist China insists belongs to them. For decades, politicians from both parties acknowledged this staggering vulnerability, wrung their hands at committee hearings, and proceeded to do absolutely nothing meaningful about it.
That streak just snapped. The Trump administration has spent the past year wielding tariff leverage against allied nations to drag semiconductor manufacturing back onto American soil – a strategy that the usual chorus of economists, editorial boards, and cable news panelists assured us would be catastrophic. Turns out the catastrophe landed on the other side of the negotiating table.
From The Epoch Times:
Japan will invest up to $21 billion to build two chip factories in New York state under a trade agreement with U.S. President Donald Trump’s administration, as Washington seeks to expand domestic semiconductor production.
They will be jointly owned by the U.S. government and Japanese interests and operated by GlobalFoundries, the company said on Oct. 14.
This is a massive win for Americans. Not a theoretical win. Not a “framework” or a “memorandum of understanding” destined to collect dust. A real one, with real money attached.
$21 billion and counting
The structure is refreshingly straightforward. Japan puts up all the investment capital – roughly $10 billion for the first factory, another $10 billion for the second. GlobalFoundries, which has operated advanced semiconductor manufacturing at its Malta, New York, facility since 2009, will run both plants. Construction kicks off this year. Chips start rolling off the line by 2029.
The kicker? The U.S. Department of Commerce will hold an equity stake in GlobalFoundries. American taxpayers benefit from the company’s growth without shouldering the construction tab. That’s not corporate welfare. That’s a shrewd deal.
None of this materialized out of goodwill. The Trump administration opened negotiations by threatening Japan with a 25 percent tariff on cars and other imports, then settled at 15 percent – in exchange for $550 billion in total Japanese investment in the United States. Commerce Secretary Howard Lutnick was blunt about the strategy: “This is how the President’s trade agreements result in transformational American industrial assets that strengthen our national and economic security.”
Tariffs as leverage, not as ideology. The distinction matters.