Today in 1991, US and Japanese officials announced an agreement governing the countries' microprocessor trade.
The agreement called for sales of foreign semiconductors to reach 20% in the Japanese market within a year. President Ronald Reagan had imposed sanctions on Japan in 1986 after finding that Japan had failed to increase the US share of the Japanese semiconductor market.
Peter Landers: “Faster than anyone thought possible, Japan ceased to be a threat to U.S. economic primacy. Under U.S. pressure, it cut interest rates to stimulate demand for imports. That spurred a historic bubble, which collapsed in the early 1990s, sending Japan into a tailspin. Soon after, all the hand-wringing about a world economy controlled by Tokyo ceased…. Japan’s case shows that slapping down No. 2 doesn’t necessarily solve the fundamental problems driving trade imbalances—including America’s propensity to spend money it doesn’t have. The imbalances with Japan transferred, in effect, to China.”
In October 2022, the US issued new export restrictions on advanced semiconductors and chip-manufacturing equipment which were “some of the broadest the U.S. has ever enacted against China’s chip industry, veering from previous actions that often targeted individual companies and a narrower subset of technology,” according to the Wall Street Journal.
In March 2023, Japan joined the US in restricting exports of semiconductor-manufacturing equipment, underscoring “a deepening geopolitical divide with China that is forcing companies to rethink their plans,” reported Nikkei.
In May 2023, China banned major Chinese firms from buying from American chipmaker Micron Technology, saying its products pose a major national-security risk. “We firmly oppose restrictions that have no basis in fact,” the US Department of Commerce responded in a statement.
Today in 1694, French economist Francois Quesnay was born. Encyclopedia Britannica: “As the originator of the term laissez-faire, laissez-passer, Quesnay believed, in opposition to the then-dominant French mercantilists… that high taxes, high internal tolls, and high barriers to imported goods were the cause of the grinding French poverty he saw around him.”