If you know or if you are an accountant.
What is Bessent talking about with Trumpâs first term writing off or expensing everything in the first year if you build a factory?
Why is that any different?
What is your opinion if corporate taxes go down to 15%?
They donât have to take years to write it off while the company goes banktrump. If you can write everything off the first year(s) you do not have any expenses.
That was not what I meant when I asked the question. I will rephrase the question.
Did Biden change what Trump had? Did Trump do what Bessent is claiming? Did the one-year thing, if it existed, get flip-flopped?
Again what is your opinion on dropping the corporate tax to 15%?
To me that is dropping what you can expense for factory building as well.
The escalating U.S.-China trade war is sending shockwaves across global markets and tech sectors. While China signals openness to talksâdemanding ârespect and consistencyââthe reality of punitive tariffs (up to 245% on Chinese imports and 125% reciprocal duties from Beijing) is already hitting companies like ASML and Nvidia hard, with the latter facing a $5.5B hit from export controls.
The Fedâs warning about tariff-driven economic pressures, coupled with volatile semiconductor stocks, underscores how this conflict threatens supply chains, earnings, and Chinaâs tech ambitions. Yet, the U.S. hints at potential pauses/negotiations (e.g., auto tariff delays, 90-day truce for other trade partners)âsuggesting a precarious balancing act between pressure and de-escalation.
Just a note that technology export controls are different than tariffs.
DB2
If the product ships in lesser quantities as tariffs are placed on the good, then the result is similar or the same. It is the point of the tariffs in larger part.
Wasnât it in January that Chinaâs Deepseek was going to eliminate or greatly reduce the need for Nvida chips?
Is the $5.5B âhitâ to Nvidia loss of sales for projected earning? Or is it manufactured inventory that cannot be sold elsewhere?
Recall top selling Blackwell chips were stripped of advanced features to comply with first round restrictions. They were known as H2O chips.
I suspect loss of projected sales rather than unsalable inventory.
But note that a technology restriction is not the same as a tariff. With a 100% tariff a country such as China could still pay double and buy, for example, deep UV semiconductor manufacturing equipment from ASML. However, that advanced technology is denied to China.
From September of last year:
Mainland semiconductor factories could face significant production challenges, as the Netherlands bans Dutch chip tool giant ASML Holding from servicing some of its most reliable equipment in China, according to industry insiders.
Earlier this month, Dutch foreign trade and development minister Reinette Klever announced a change to the countryâs export controlsâŚ
DB2
Weâre aligned with you, Bob. Thanks for clarifying that 0% export control allowance is fundamentally different than some demand/supply portion at a different price (net of tariffs).
252% of 0 is⌠zero.
Just to clarify this,
Deep UV is older tech, 5-10 years old. The restriction is on providing service on these older machines
EUV is the newer smaller wavelength tech.
As summarized by ChatGPT:
Process Nodes Using DUV Lithography
- 7 nm: Initially used DUV immersion lithography
- 10 nm: Commonly employs DUV lithography
- 14 nm and larger: Predominantly use DUV lithography
Process Nodes Using EUV Lithography
- 7 nm: Transitioned to EUV for certain layers
- 5 nm: Extensively uses EUV lithography
- 3 nm: Primarily relies on EUV lithography
2nm and smaller is being built now.
Back in late 2020 and 2021 the big automotive chip shortage was mainly 20nm to 32nm
No one has figured out what is after EUV AFAIK.
Mike
Just adding that China will perhaps trial a different tech for producing EUV chips:
March 2025
Weekly news roundup: China's EUV breakthrough and Chinese lawmakers' proposal for anonymous semiconductor purchases.
{ Chinaâs EUV breakthrough: Huawei, SM!C reportedly advancing LDP lithography, eye 3Q25 trial, 2026 rollout
China is making significant strides in extreme ultraviolet (EUV) lithography with the development of a domestic EUV system, currently being tested at Huaweiâs Dongguan facility. Trial production is set for the third quarter of 2025, with mass production planned for 2026. Chinaâs system uses laser-induced discharge plasma (LDP) technology, an alternative to ASMLâs laser-produced plasma (LPP). }
Feb 2025:
ralph
Sm!c - put an I in for the !
Of course ASML is not standing still. They are already on the next generation of EUV. It is High-NA EUV. (High numerical aperture). Intel has already been testing it and TSMC is supposed to start in a month or two.
But China is certainly getting less behind than they were a decade ago.
Mike
The trading pivots are critical to understand in advance.
As Trump leaves office we can pivot to work with Japan and Europe. China can not. Japan and Europe post Trump wonât want to see their labor laid off or their pricing systems undermined. Japan is demand side econ right now as is the UK. The EU has the financing, supply side economics. China will be locked out.
Trump is our bad cop. Next will be a good cop.
