But Taiwan isn't an adversary of the USA so why would tariffs be "another approach"?
That’s the problem we are trying to solve: Too many important chips are made there.
[1] https://www.wto.org/english/tratop_e/dtt_e/dtt-ita_e.htm
It’s much more cleanly done with loans.
The reason as always is politics.
For example, the Federal civil service ("general service") pay scale tops out around $160k. This really doesn't make sense and costs the government multiples of market wages for hiring for roles where market pay is higher than this. One route is to hire that person via a contracting firm with a huge (double or triple) markup.
And of course the reason we don't just revamp the pay scales and pay market wages is because it's political suicide to pay people half a million or more at market rates.
The American people, on average, don't like the level of wage inequality in society. For any particular issue where you shove it in their faces (like proposing to pay the project lead "competitive salary"), you will get shouted down.
That's also why we get strange arrangements like Congress members making around $170k a year with legal insider trading. The insider trading money they make looks like "free" and isn't easily quantified.
My broader point here about self fulfilling prophecy is reflected in your comment: it has been this way, therefore must always be this way. That’s not true.
Medicare for example is much more efficient than private health insurance.
The motivation for government employees is "because they care about doing the right thing". You should try it some time.
[1]: https://www.regjeringen.no/en/topics/business-and-industry/s...
[2]: https://en.wikipedia.org/wiki/Statkraft
[3]: https://www.nrk.no/norge/statkraft-oker-inntekter-og-bonuser...
[4]: https://www.dn.no/energi/narings-og-fiskeridepartementet/lo-...
[5]: https://www.mesta.no/wp-content/uploads/2023/03/Mesta_Vedleg... (page 2)
I would hazard to guess that most employed people do not have stock options or get bonuses (only salary), but are still "effective" because they consider that doing a job well is its own reward: i.e., they have intrinsic motivation (rather than extrinsic).
I have worked in private sector, and in government (including academia/research), and most folks want to do a job well because they like the satisfaction of being able to know they did the job well.
[0] https://asiatimes.com/2024/03/america-has-no-ukraine-plan-b-...
The Chip Wars book is an excellent read and tells you us the supply chain is globally integrated. If we were to draw a country graph of technology dependence to create semiconductor technology T (tools, chips, etc) - well, there is no DAG. The defense department is not so happy to see all this free market sharing of essential technology going on as it benefits non-friendly nation(s).
The book also illustrated how behind Russia was/is with weapons technology and semiconductors in general (compared to the US).
The economic effects are important but secondary to the national security effects of having TSMC chip manufacturing on US soil.