Chapter 1: Analyzing Biden’s Approach to China

In stark contrast to the previous administration's blunt tool of tariffs, President Biden has adopted a more intricate strategy against China, particularly in the realm of technology. While tariffs serve as a visible weapon in trade wars, they are less effective against a formidable economic player like China.

This approach reflects a shift in focus, moving away from mere trade barriers to a broader tactic aimed at stifling China’s technological advancement, particularly in the high-tech sector.

Section 1.1: The Subtlety of Biden’s Strategy

Biden’s method may not make headlines like the tariffs of his predecessor, yet it is equally, if not more, impactful. His administration has initiated a series of executive orders under the guise of national security, aimed at curbing China's growth. The primary intent is clear: to decelerate China's progress and allow the United States to regain its competitive edge.

Subsection 1.1.1: The Role of ASML and Semiconductor Production

One significant move has been the ban on American tech firms working with China, which extends to allied nations as well. A pivotal player in this scenario is ASML, a Dutch company that holds a monopoly on EUV lithography machines. These machines are essential for manufacturing approximately 75% of chips, including all advanced node chips, which are critical for modern devices.

China remains capable of sourcing advanced chips from companies like TSMC and Samsung; however, without the ability to produce them independently, they are at a significant disadvantage. The only chips they can manufacture are those suited for less demanding applications, such as IoT devices and smartwatches.

Chapter 2: Implications of the CHIPS Act

The first video titled "Joe Biden Tariffs Against China Just Backfired on the US Economy!" discusses the unintended consequences of tariff policies and how they have affected the U.S. economy.

In the second video, "Biden's tariffs on China are a doubling down on industrial policy strategy, analyst says," experts analyze the long-term implications of Biden's industrial policies and their potential effects on U.S.-China relations.

The CHIPS Act is set to reverse decades of offshoring manufacturing and aims to bring jobs back to the U.S. By providing subsidies and tax incentives for new semiconductor fabs, the act seeks to ensure that America is not only competitive but self-sufficient.

Biden’s strategic vision emphasizes national security, recognizing the potential risks posed by a reliance on Taiwan for chip production. Should conflict arise, the repercussions on global supply chains would be severe.

As the U.S. works towards achieving chip independence, it must navigate numerous challenges, including a lack of current manufacturing capacity and the need for substantial investment in infrastructure.

Despite these efforts, some analysts predict that China could still surpass the U.S. in GDP output by 2030, albeit with a delay due to the combined effects of the pandemic, Biden’s initiatives, and internal political strife within China.

In conclusion, while the CHIPS Act represents a significant shift in U.S. policy, the road to achieving semiconductor independence will be fraught with obstacles. Biden’s initiatives may delay China’s ascent, but the question remains whether they will be enough to prevent it altogether.