Debunking the Biggest ‘Success’ Story of Trump’s Tariffs

Paul J. Warburg 24 min

Confusing correlation with causation is a common mistake used to win arguments without being correct. TSMC moves to the U.S. due to fear of Chinese attacks on Taiwan, not because tariffs make sense financially.

  • Donald Trump
  • Joe Biden

Chapters

  1. 0:00

    The Correlation-Causation Mistake

    Confusing correlation with causation is a common error used by journalists and politicians to win arguments without being correct.

  2. 0:55

    Tariffs vs. Manufacturing Growth

    People wrongly attribute U.S. manufacturing growth, like TSMC's investment, to tariffs rather than other factors. Tariffs cannot motivate manufacturing because they are temporary artificial advantages in a democracy with changing administrations. Companies like TSMC invest due to poor protection of allies and geopolitical risks, not tariff advantages.

  3. 5:47

    TSMC's Business Model

    TSMC manufactures chips for others using massive facilities called fabs that require extremely expensive energy.

  4. 9:39

    Energy Cost Disparity

    U.S. energy costs are twice as high as Taiwan's, making manufacturing there significantly more expensive.

  5. 12:42

    Construction and Labor Costs

    Building costs in the U.S. are four times higher than in Taiwan, and labor costs are also double.

  6. 16:40

    The China Factor

    TSMC moves to the U.S. due to fear of Chinese attacks on Taiwan, not because tariffs make sense financially.

  7. 19:26

    Pre-Trump Investments

    Major TSMC investments began during the Biden administration under the CHIPS Act, proving tariffs are not the cause. TSMC keeps delaying projects until 2027, hedging bets against geopolitical risk rather than chasing tariff benefits.

  8. 22:04

    Political Misinterpretation

    Politicians wrongly claim credit for these investments, ignoring the underlying facts about costs and security.

Key points

  • 0:00

    Confusing correlation with causation is a common mistake used to win arguments without being correct.

  • 0:55

    People wrongly attribute U.S. manufacturing growth, like TSMC's investment, to tariffs rather than other factors.

  • 0:55

    Tariffs cannot motivate manufacturing because they are temporary artificial advantages in a democracy with changing administrations.

  • 0:55

    Companies like TSMC invest due to poor protection of allies and geopolitical risks, not tariff advantages.

  • 5:47

    TSMC manufactures chips for others using massive facilities called fabs that require extremely expensive energy.

  • 9:39

    U.S. energy costs are twice as high as Taiwan's, making manufacturing there significantly more expensive.

  • 12:42

    Building costs in the U.S. are four times higher than in Taiwan, and labor costs are also double.

  • 16:40

    TSMC moves to the U.S. due to fear of Chinese attacks on Taiwan, not because tariffs make sense financially.

  • 19:26

    Major TSMC investments began during the Biden administration under the CHIPS Act, proving tariffs are not the cause.

  • 19:26

    TSMC keeps delaying projects until 2027, hedging bets against geopolitical risk rather than chasing tariff benefits.

  • 22:04

    Politicians wrongly claim credit for these investments, ignoring the underlying facts about costs and security.

Who and where

People · 2

  • Drawing of Donald Trump

    Donald Trump 7

    President of the United States (2017–2021; since 2025)

    Photo 1

  • Drawing of Joe Biden

    Joe Biden 1

    46th President of the United States (2021–2025)

    Photo 2

1. Photo: Daniel Torok, Public domain, via Wikimedia Commons · Wikidata · redrawn in our house style (Donald Trump)

2. Photo: Adam Schultz, Public domain, via Wikimedia Commons · Wikidata · redrawn in our house style (Joe Biden)

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