When It Comes to the Possibility of a Recession, US Commerce Secretary Raimondo Issues a Warning.

US Commerce Secretary Gina Raimondo issued a warning on Wednesday, saying that the nation's current reliance on Taiwanese computer chip manufacturing places it at risk of experiencing a recession should that connection ever be severed.

July 21, 2022 - 12:35 PM 223 views

When It Comes to the Possibility of a Recession, US Commerce Secretary Raimondo Issues a Warning.

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© When It Comes to the Possibility of a Recession, US Commerce Secretary Raimondo Issues a Warning.

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US Commerce Secretary Gina Raimondo issued a warning on Wednesday, saying that the nation's current reliance on Taiwanese computer chip manufacturing places it at risk of experiencing a recession should that connection ever be severed.

Key Quotes

Even while US-based firms like Intel develop a lot of computer chips, the manufacturing site is just as crucial.

It's a frightening thought to consider a situation in which the United States lost access to the chips currently produced in Taiwan.

It is a severe and recent recession. It's our inability to make military weaponry to defend ourselves. This must be produced in America. In order to avoid becoming overly reliant on foreign nations, we need a manufacturing base that makes these chips here in the United States, or at least enough of them to meet our needs.

The establishment of semiconductor manufacturing facilities in the US would benefit from subsidies provided by the more than $50 billion CHIPS Act.

The Market Reaction

Prior to the important central banks' policy statements, risk sentiment is still in a worsening state. The US dollar index falls 0.12 percent to 106.95 while the S&P 500 futures are down 0.20 percent for the day.

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