Illustration: Liu Xidan/GT

In a move celebrated by Washington's political leaders as a milestone in leading the "American-Made Chips Boom," Nvidia's announcement of plans to manufacture its artificial intelligence (AI) supercomputers entirely in the US has been highlighted on the White House's official website. This initiative is part of the company's pledge to produce $500 billion worth of AI infrastructure in the US over the next four years. However, the path forward in the "American-Made Chips Boom" is likely to be more complex and fraught with challenges than the initial excitement might suggest.

The global tech landscape is a complex web of supply chains and interdependencies that stretch across borders, with the semiconductor industry epitomizing this global interconnectedness. From the standpoint of the US economy, due to factors such as higher labor costs, some might argue that efforts to revive the manufacturing sector in high-tech areas like AI supercomputers, rather than in lower-end, labor-intensive manufacturing, might be more feasible. However, it is precisely this high-end segment that is most challenging to develop in isolation from the global economy, market and supply chains, given the complexity of the global tech industry. Unfortunately, current US tariff policies are, to a large extent, isolating the American economy.

In the discourse on the resurgence of American manufacturing, particularly within the high-tech sector, a nuanced understanding of the global economic landscape is indispensable. 

First, the development of the US high-end manufacturing sector is inextricably linked to the support of international supply chains. According to a report on the website of the Information Technology and Innovation Foundation, 51 percent of the goods imported into the US are intermediate goods, including sectors such as chemicals, electrical equipment and information communications technologies. This figure illustrates the extent to which the US manufacturing sector is built upon a foundation of international supply chains.

Second, the growth of the US high-end manufacturing industry is heavily reliant on access to international markets. Exports of high-end manufactured goods play an important role in profit generation for the US manufacturing sector. However, the tightening of export controls on high-tech products, including advanced AI chips, by the US government, represents a zero-sum approach to technological competition. This strategy not only limits the export potential and profitability of the US high-end manufacturing sector but also risks alienating international partners and markets.

Third, and perhaps most critically, the "return" of high-end manufacturing to the US necessitates efforts by American tech giants. These corporations have been deeply integrated into the global economy over recent decades, driving and benefiting from the wave of globalization.

For instance, company filings show that Nvidia gets about 56 percent of its revenue from customers outside the US, with China making up about 17 percent of sales, according to a report by Reuters in January.

These figures exemplify how American tech behemoths are now deeply linked with the global economy. The push for deglobalization by Washington, if pursued aggressively, could potentially harm the interests of these American tech enterprises. The revival of the US high-end manufacturing sector is contingent upon the efforts of these tech giants, which, in turn, necessitate a global economic framework and the continuation of globalization.

The path to revitalizing America's high-end manufacturing industry is not through retreating into isolation but through leveraging and enhancing its integration with the global economy. However, regrettably, current US tariff policies run the risk of isolating the country in the world, as some economists suggested. 

Detaching from the global economy, whether it's the so-called American-Made Chips Boom or the revival of high-end manufacturing, might just be a mirage. Tariffs may not significantly bring manufacturing back but could potentially weaken the ties between American manufacturing and the international economy, thereby dealing a heavy blow to domestic manufacturing in the US. 

The author is a reporter with the Global Times. bizopinion@globaltimes.com.cn