In the world of politics it is up to the politicians to make the agenda and to implement their agenda. The agenda will help some companies, it will be neutral for some and others will see as hurting their interests or ability to make money. After the agenda is set, it is up to the politicians and Secretary of Departments to sell the agenda to the people of the country. If more think it is the right approach, they will be reelected and have another agenda. If people do not like the agenda, it is time to change governments. In Washinton, President Biden has a less than positive approach to China. Maybe that is good, maybe not so good, but Biden has a policy.

In an article by Tripp Mickle, David McCabe and Ana Swanson of the New York Times News Service, a year after the Biden administration took its first major step toward restricting the sale of semi-conductors to China, it has begun drafting additional limits denying Beijing the technology critical to modern day weapons.

Since July, the big chip makers Nvidia, Intel and Qualcomm have pressed their case that cracking down on China would have unintended consequences. The lobbyists have talked to Secretary of State Blinken, Commerce Secretary Raimondo, done the rounds with think tanks in Washington, and urged leaders to reconsider additional chip controls.

One of the topics has been: at the moment, chips are dominated by American-designed; by isolating China, you will force them to come up with Chinese-designed chips.

Lawmakers are confused because Washington committed $50 billion to the industry through the Chips and Science Act. The money helps pay for more manufacturing chips in the US and the 3 companies have announced plans to build in Arizona, Ohio and New York.

China accounts for 1/3 of the global semi-conductor market and more than $50 billion in combined revenue for Nvidia, Intel and Qualcomm. The chip makers suggested that too many controls on China will mean less revenue for them and the need to cut costs – either people, research and development or the plants in swing states.

Linking to dividend paying stocks, most dividend paying companies like to have it both ways and there is a benefit to them either way. The companies are large enough to dangle carrots in front of the politicians and allow them to say whatever they want but not do whatever they want to. With legislation there is always the unintended consequences of their actions.

There are more questions than answers, till the next time – to raising questions.