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Noah Smith

Taiwanese Chips Made in Arizona Is the Future of U.S. Trade

A Taiwan chipmaker's new factory — and all the jobs that will come with it — provides a model for attracting foreign investment in a  global economy shaped by automation.

High-tech manufacturing provides jobs inside and outside the factory.

High-tech manufacturing provides jobs inside and outside the factory.

Source: Bloomberg

Taiwan’s world-beating semiconductor company, TSMC, is chartering a container ship to move pieces of equipment to its new factory in Arizona. The move may herald a new era of foreign investment in the U.S. — but only if America plays its cards right. The key will be to see global supply chains as an opportunity rather than a threat.

For decades, the U.S. attitude toward global supply chains has been a defensive crouch. As the internet and a more open global economy made it easier to outsource production, U.S. manufacturers moved their factories overseas — first to places like Mexico and Southeast Asia, then in a huge flood to China. It was this last shock that was particularly damaging to the careers of many American factory workers. That negative experience scarred a generation, and created the popular perception that trade, supply chains and foreign investment were all simply ways for corporate overlords to ditch well-paid American workers for cheaper overseas labor. It was this attitude that caused the Trans-Pacific Partnership trade agreement to be scuttled.