Commerce Secretary Wilbur Ross has been in discussions for several years with both TSMC and Intel to build advanced chip manufacturing plants in the U.S. and extract U.S. supply chain needs from China and southeast Asia.  It appears his efforts, and the emphasis on global supply-chain shifts from President Trump, are getting results.

According to numerous media reports Taiwan Semiconductor Manufacturing Co (TSMC) is likely to announce this week they will build an advanced chip manufacturing facility in Arizona.  A manufacturing facility for advanced 5 nanometer chip manufacturing is a steep investment decision costing around $10 billion.

This shift in a high-tech supply chain will align with President Trump’s prior discussions with Tim Cook the CEO of Apple which led to a decision to invest in Texas.  TSMC is a chip supplier for Apple products; and Apple is moving to the 5nm processors in new devices. It looks like the movement of advanced industrial products away from China is underway.

(Via Appleinsider) – Apple supplier Taiwan Semiconductor Manufacturing Co. is set to announce that it plans to build an advanced chip factory in Arizona.

Taiwan-based TSMC is the world’s largest contract manufacturer of silicon chipsets and has long been Apple’s primary supplier of A-series chips.

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White House Director of Trade and Manufacturing Policy Peter Navarro appears for an interview with Maria Bartiromo.  As a China hawk Navarro outlines the economic damage from a perspective where China needs to be held accountable.

One of the ways to hold Beijing accountable is to retract all U.S. business interests and decouple from China.  The White House is currently using a task-force approach to assemble the background evidence.  Once assembled, many people suspect President Trump will initiate very strong policies against China (including tariffs) simultaneously timed with tax incentives for U.S. companies to return manufacturing back to the U.S.

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If you think about the economic vulnerabilities currently carried by China, it is entirely possible for USTR Lighthizer, Secretary Mnuchin, Secretary Ross and Peter Navarro to structure serious financial punishment upon the Red Dragon.

At no time in the past twenty years has Beijing been more vulnerable to an economic adversary.  At the same time, there has never been a more strategic economic adversary in the oval office. This is a conspicuously remarkable moment in history.

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U.S. Trade Representative Robert Lighthizer and U.K. Secretary of State for International Trade Elizabeth Truss announced today [joint statement] the beginning of a series of fast-tracked trade negotiations toward a new free trade agreement. [USTR Release]

In the foreground is a trade agreement between the U.S. and the United Kingdom. However, in the more strategic background context these negotiations create leverage for the U.K. in their post-Brexit negotiations with the European Union. First from today:

LIGHTHIZER – […] The US negotiating team will be led by Dan Mullaney, Assistant U.S. Trade Representative for Europe and the Middle East; and the UK negotiating team will be led by Oliver Griffiths, Director for US Negotiations at the Department for International Trade. Over 200 staff from U.S. and UK government agencies and departments are expected to take part in the negotiations.

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Wall Street’s U.S. multinationals moved the majority of U.S. apparel manufacturing to southeast Asia for the past several decades; as a result they virtually wiped out major apparel hubs in the United States.  Now those same multinationals are claiming their production shift to making masks and PPE in China means the tariffs on imports should be lifted; and they are sending their corporate lobbyists into DC to pitch that message.

Nonsense.

There are no tariffs on U.S. healthcare products made in the USA.  If the apparel industry wants to avoid tariffs, then bring the manufacturing back home.  Critical manufacturing in the United States is what U.S. consumers of those and other goods want.

President Trump should not lower tariffs on imported PPE, he should actually raise those tariffs as high as needed to shift that manufacturing back to the U.S.

The time is now to wage battle against the Wall Street manufacturers & K-St lobbyists.

WASHINGTON (Reuters) – The Trump administration is “turbocharging” an initiative to remove global industrial supply chains from China as it weighs new tariffs to punish Beijing for its handling of the coronavirus outbreak, according to officials familiar with U.S. planning.

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White House Advisor to the President Kevin Hassett discusses the importance of using May to get as many states open as possible.  The President has asked for data daily to measure the amount of the economy that is reopening.  As the economy opens there’s less need for a ‘phase-4’ relief/bailout bill.

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President Trump participates in a roundtable discussion with various industry executives on the plan for reopening the American economy. Anticipated start time 4:00pm ET.

White House Livestream Link – Fox News Livestream – RSBN Livestream

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National Economic Council Director Larry Kudlow argues the worst of the coronavirus pandemic is over and the U.S. economy is getting ready to reopen. Kudlow outlines the scale of the current economic relief package how any further discussion should focus on policies to launch the economic recovery.

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The Bureau of Economic Analysis (BEA) released the first quarter Gross Domestic Product (GDP) advanced estimate and the result is a 4.8% decline in economic activity. [BEA Here]

The revised fourth quarter GDP shows the economy was growing at 2.1 percent prior to the COVID-19 shutdown.  The severity of the change in GDP reflects a severe drop in consumer spending, essentially bringing the economy to a halt in March as the entire nation went into lock-down.  As the BEA explains:

The decline in first quarter GDP was, in part, due to the response to the spread of COVID-19, as governments issued “stay-at-home” orders in March. This led to rapid changes in demand, as businesses and schools switched to remote work or canceled operations, and consumers canceled, restricted, or redirected their spending.

The full economic effects of the COVID-19 pandemic cannot be quantified in the GDP estimate for the first quarter of 2020 because the impacts are generally embedded in source data and cannot be separately identified. (more)

Digging down into the details the data shows what we all have seen.  There is some specific data that is noteworthy in the tables.

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Kevin Hassett, senior advisor to President Trump, says we’re going to see unemployment rates similar to what we saw during the Great Depression, but the White House has a plan for an economic comeback.  As Hasset notes: due to various relief programs the overall worker income is still consistent, but outputs from income are non-existent.

In this interview with CNBC Hassett estimates the current unemployment rate at 16 to 17 percent; & the likely result of the second quarter GDP around -20 to -30 percent. Hassett notes the Bureau of Economic Analysis (BEA) has several challenges as they attempt to quantify economic activity during the shut-down.  However, those are stunning numbers.

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With the economy at a halt, and unemployment skyrocketing while various Wuhan Virus mitigation efforts are underway, President Trump has announced his intent to suspend all immigration.  We’re closed:

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