EU's carbon border tax is coming

Uh, I am not arguing. I am telling you want the bean counters actually do. They look at PROFIT. They pick the location that maximizes it.

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Good but the point is right now the US tax code for informed bean counters points to building factories in the US. I am explaining part of why.

For some items, say for semi-conductors, it might make sense to have a US-based manufacturer. There are very few higher-tech manufacturing facilities because of investment cost and the speed at which that new tech becomes obsolete. However, for other items, it would make sense to have a more distributed manufacturing system–depending on the market demand for each item. Produce in Asia for the Asian market, and so on.

The usual advice is produce close to the customer or close to raw materials. Or where you have low cost labor.

In the case of semiconductors none of this applies. Semiconductor production is highly automated, not labor intensive. The product is light weight and inexpensive to ship. The raw material is sand, available everywhere.

The large investment involved favors economic stability over other factors. Of course govt subsidies help.

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Except for all the stuff you pile on top of and around the sand to make the chip do something. :face_with_monocle:

The Captain

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Heh heh … and the stuff you use to “wash” each layer as necessary.

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Yes, there is specialized technology in every aspect of semiconductor manufacture. That includes high purity chemicals, photoresists, etchants, and the automated equipment to use them.

But the quantities involved are tiny. Not a railcar business. Easy to ship.

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DB2

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Both India and China continue to denigrate the Carbon Border Adjustment Mechanism (CBAM), or “carbon tax” as it has come to be known, proposed by the European Union. Meanwhile, the EU claims the new scheme is integral to its plan to achieve zero emissions across six earmarked industries.

The new tax regime recently moved into what some experts dub the “transition phase.” Starting on October 1, importers of commodities, including steel, into the EU need to report the carbon emissions of those products. Beginning in 2026, those importers will also be subject to fees. The EU aims to impose the new tax on countries with significant carbon emissions. And while the carbon tax’s stated aim is to put EU producers on an even keel with their counterparts elsewhere, it will also add to the cost of steel, aluminum, and other goods.

China has been speaking out against the EU’s carbon tax for some time now. However, several days ago, the country’s state-backed steel association went so far as to dub the tax “a new trade barrier.”…China continues to hint at imposing similar trade protection measures to safeguard the interests of its own domestic producers.

DB2

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Yes, I can imagine how China would set up their system of import taxes - the more individual freedom the exporting country supports, the higher the import tax would be. :crazy_face: