Breitbart Business Digest: The AI Boom Shows What America Lost When It Let Chipmaking Leave
The digest says the 3.4% third-quarter growth rate leaned on business investment, while record imports of computer equipment pulled it down. It argues offshoring policy, not American workers, drove the decline, and credits Trump with a turnaround.
A Breitbart Business Digest column reads the latest growth report as a warning about who builds the machines behind the AI boom.
The growth. The Commerce Department said Thursday the economy grew at a 3.4% annualized rate in the third quarter, up from 2.2% in the second and above what economists expected. Business investment drove it: nonresidential fixed investment rose at a 12.7% rate and equipment investment at 20.9%. Computers and other information-processing equipment together added nearly nine-tenths of a percentage point.
The drag. Net exports subtracted 3.32 percentage points from growth, which the column says Harvard economist Jason Furman called the third-largest negative contribution since the series began in 1947. Imports rose at a 19.7% rate. The Census Bureau's advance figures put capital-goods imports at a record $157.4 billion in September, up 77.2% from a year earlier. The column cites a Federal Reserve study from July estimating that about 90% of the equipment used in high-tech sectors originates abroad, much of it in East Asia.
The history. The author says the U.S. share of global chip manufacturing capacity fell from 37% in 1990 to about 19% in 2000 and 10% in 2022. He blames the move of electronics assembly to Asia, Japan's and Taiwan's industrial policies, American tariff rules and tax policy that favored overseas investment, and leaders in both parties who backed offshoring "until we elected Donald J. Trump." He says the jobs left because "our rules pushed them out, and our trading partners' rules pulled them in."
The turnaround. The column points to TSMC's Arizona expansion, Samsung's fab in Taylor, Texas, and new capacity from Micron and Texas Instruments. It cites projections from the Semiconductor Industry Association and Boston Consulting Group that U.S. chipmaking capacity roughly triples by 2032, lifting America's share from about 10% to 14%. It warns that skilled workers are in short supply and that servers and equipment are still largely assembled overseas.
Note for readers: this is an argument column, and the projections are industry forecasts, not results. Our earlier stories on the third-quarter growth report and the Breitbart Business Digest series are on the site.