President Trump has based his arguments for tariffs on steel and other goods on national security. That is, in form, a valid argument for tariffs. There may well be a good reason to have some domestic production capabilities because of external threats. After all, that’s why the much-debated section of a 1960s law that gives the president power over tariffs exists in the first place. Although Trump’s reasons may have been correct, he should have picked motherboards instead of steel.
On Thursday, Bloomberg News published a bombshell report alleging that the Chinese military had manipulated motherboards produced for a U.S. company in China by adding a tiny component that allowed for external modifications. Although that report is entirely based on anonymous sources and has been strongly denied by the companies involved, it should be a warning that supply chain security for key technology must be taken seriously.
Currently, no motherboards are manufactured in the U.S., although many electronics that use them are assembled here. Motherboards, however, underpin the computing capabilities of not only American industry but also intelligence and military operations. Indeed, some of the systems alleged to be compromised in the reported hack include CIA drone operations and shipboard computers used by the Navy.
Although discussions on military preparedness still tend to focus on traditional weapons such as aircraft carriers and missiles that rely heavily on steel, increasingly other countries are looking to leapfrog ahead, foregoing these traditional weapons and focusing on developing technologies of the future such as artificial intelligence and advanced robotics where the U.S. could be outcompeted in the future.
The upshot of that is not only that the U.S. needs a serious plan, but that things like steel may well be less important, and easier to get, in future fights than motherboards.
Unfortunately, based on the Bloomberg report, compromising those motherboards looks to be a serious goal of potential adversaries and one that the U.S. was unprepared to stop, let alone take serious steps to avoid.
For Trump, a self-styled champion of “made in America,” motherboards could be a good rallying cry. He could bring back some of those manufacturing jobs and actually have a good national security argument for supply chain security of electronic component parts.
Of course, that would require not reopening old factories but building new ones and retraining workers for a new type of manufacturing. In the short term, that’s a much harder political sell than steel mills but one that will likely prove far wiser.
If Trump truly cares about protecting national security and wants to keep manufacturing jobs in the U.S. because of it, he should focus on things like motherboards, not steel.