Deal Between the US – Taiwan and Greenland at the Forefront
Welcome back to “TAXING TARIFFS!” Brought to you by Micron Corporation where “We build it better.”
Of the utmost importance towards our globally shared commitment to electronics manufacturing, Taiwan and the United States came to an agreement on a $250B deal. This, in addition to a reciprocal tax that will maintain tariffs to approximately 15%, rather than 40%, or more, for now. The two nations under their democratic leaderships have come to this agreement. And that may be a very good thing. If both these nations have come to this position because of economic forces, rather than militaristic positioning, all the better.
Specific levels of tariffs are important for sure. And yet, the numbers being bandied about are more political positioning than proper assessments of the actual levels of taxes being levied. For evidence of this we need look no further than the United States International Trade Commission publication of the “Harmonized Tariff Schedule of the United States (2025) Revision 32” in December under Publication Number: 5690.
Greenland is now at the forefront. Because of it’s strategic location in the Arctic Ocean it is in the sights of the current U.S. administration. Positioned at the center of the northern geographic locations of Russia, Europe, Canada, and the U.S. state of Alaska it certainly has tremendous geopolitical value. It also has “immense” stores of so called rare earth elements. The current president has called for the acquisition of Greenland. In doing so, he has joined the ranks of President Truman and other politicians from the late 1800s (when the U.S. acquired Alaska) that have discussed such a matter. The Kingdom of Denmark has never appreciated such notions.
And, perhaps, we are all becoming patriots now; each from their own nation. Let’s add the current national targets of recent US tariff policies to our list of trade partners. These are Denmark (which owns Greenland), Norway, Sweden, France, Germany, the Netherlands, Finland, and the United Kingdom. All of which may be facing an increase of 10% tariffs for opposition to such an acquisition. Once again, what that 10% actually represents is not yet specific, ad valorem, or even perhaps subject to de minimis rules.
At the World Economic Forum in Davos the American President not only stated his intention to acquire what he often calls “Iceland” he went so far as to suggest he might use military force. In response, small numbers of troops from other countries have been deployed to Greenland. Fifteen French mountain infantry soldiers, some number of Swedish troops, and a 13-person German Army reconnaissance team were being mobilized to show America capturing Greenland would be opposed. Small numbers of forces indeed. Yet the point was made. And by the end of the forum in Davos enough pushback had been delivered that the American president backed off. What else happened during the 72-minute presentation was either astounding, surreal, or just plain upsetting depending on your perspective. After having been emboldened by tariff “negotiation” victories, and the wresting of a dictator named Maduro from the country of Venezuela, the current president seemed emboldened enough to confront, insult, and just plain “piss off” everyone even his own administration.Back in North America there has been an “Unexpected Winner,” according to the WSJ. Mexico, which according to some economists may have had been set up for difficult economic situations because of the tariffs has actually increased its exports to the U.S. Auto-industry exports took a hit, that’s for sure, but all other exports of manufacturing goods surged 17%. That includes steel and aluminum. All that good news even with the imposition of 25% tariffs in 2025. Trade in goods (not necessarily services) between the U.S. and Mexico reached approximately 900$B in 2025. The president had taken to holding up placards listing new tariff rates for so many countries, but not for Mexico. With that positive development, Mexican companies apparently experienced a great increase in restarting manufacturing projects. Today, almost 85% of Mexico’s total exports remain tariff-free under the USMCA.
That 85% tariff-free number belies the fact that political negotiations and statements about tariffs certainly don’t tell the whole story. Remember there is a Harmonized Tariff Schedule with so many details in it that one should be wary of summing up tariffs for any one country with a single number.
Do you view Taiwan’s deal as positive? What do you think about Greenland? Should America try to wrest control of the largest island in the world? And are you happy that Mexico is exporting more? After you answer these questions at INFO@MICRONCORP.COM we’ll see you next time on TAXING TARIFFS.