Trump’s Tariffs Won’t Solve U.S. Chip-Making Dilemma

Plus: Money Doctor & Captain Pakistan: Steve Hanke’s Last Call with Imran

Author

Hafizur Rahman
August 11, 2025

Today's Newsletter Highlights:

  • Trump’s Tariffs Won’t Solve U.S. Chip-Making Dilemma

  • Money Doctor & Captain Pakistan: Steve Hanke’s Last Call with Imran

  • Microsoft's Impressive Free Cash Flow - MSFT Stock Could Be Worth 28% More

  • Best AI Tools

AI NEWS TODAY

Trump’s Tariffs Won’t Solve U.S. Chip-Making Dilemma

Donald Trump, the former U.S. President, suggested a 100% tariff on imported chips and semiconductors. This would apply unless companies produce chips in the U.S. The goal is to boost local chip production and reduce foreign manufacturing. But, industry experts say the plan is unlikely to solve America’s chip-making problems.

Key Points:

  • Exemptions in place: TSMC and Samsung are building factories in the U.S., so they will avoid tariffs. This means the tariff won’t push many more companies to build here.

  • High cost of U.S. production: Making chips in the U.S. incurs much higher expenses than in Asia. TSMC says its U.S. factories could cut profits by 2 to 3 percentage points compared to its Taiwan operations.

  • Limited new investment: Firms will likely invest only enough to dodge tariffs. They won’t invest enough for big advancements in chip-making.

  • Impact on consumers: Higher tariffs could raise prices for electronics and other products. Apple might dodge these costs due to its U.S. investments. But many other companies could pass the extra costs on to consumers.

  • Global supply chain facts: Manufacturers can make chips in the U.S. They often get parts and materials from other countries. So, tariffs can't completely localise production.

Money Doctor & Captain Pakistan: Steve Hanke’s Last Call with Imran

Steve Hanke, known as the “Money Doctor” for his inflation control skills, also earned the nickname “Captain Pakistan.” This was during his efforts to stabilise Pakistan’s economy. His latest message to former Prime Minister Imran Khan shows the serious economic issues in South Asia. People often call this a "doom loop." [Unable to access full article for details]

Key Points

  • Nickname & Reputation: Steve Hanke is famous for fighting inflation worldwide. He’s also called “Captain Pakistan” because of his work on Pakistan’s financial policy.

  • Final Interaction: His last call with Imran Khan talks about economic crises that keep happening in South Asia.

  • Economic Context: The region may be trapped in a recurring “doom loop” of debt and inflation.

  • Expert Weight: Hanke ranks as one of the top economists, adding credibility to his views.

Microsoft's Impressive Free Cash Flow - MSFT Stock Could Be Worth 28% More

Microsoft recently shared strong growth in free cash flow (FCF) and better FCF margins. At the same time, analysts expect their capital expenditure (capex) growth to slow down. This may mean that investors undervalue the stock, providing an upside of around 28%.

Key Points:

  • Strong free cash flow: Microsoft showed solid FCF growth and better margins in its latest earnings.

  • Capex is likely to slow down. Investors will still make investments, but they expect growth to ease. This could free up more cash for shareholders.

  • Valuation looks good. Analysts believe Microsoft’s stock could rise by about 28%. This is due to strong cash flow and solid long-term growth potential.

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