The statement “Sovereignty Begins with Currency, AES Will Exit CFA Franc,” attributed to Niger’s Foreign Minister, reflects a growing sentiment among some West African nations, particularly those in the Alliance of Sahel States (AES)—Niger, Mali, and Burkina Faso. These countries, all under military leadership following recent coups, have expressed intentions to distance themselves from the CFA franc, a currency tied to the euro and historically linked to French colonial influence. The AES views the CFA franc as a barrier to full independence, arguing that true sovereignty requires control over their own monetary system.

The CFA franc, used by eight West African countries in the West African Economic and Monetary Union (UEMOA) and six in Central Africa, has long been a point of contention. Critics argue its peg to the euro and past requirements to deposit reserves with the French Treasury limit economic autonomy, keeping these nations tethered to France. Proponents, however, highlight its role in providing stability and low inflation in a volatile region. The AES countries, having already withdrawn from the Economic Community of West African States (ECOWAS) in January 2024, see exiting the CFA franc as a logical next step in asserting sovereignty.

While the Nigerien Foreign Minister’s statement signals intent, no concrete timeline or detailed plan for a new currency has been universally confirmed across the AES. In late 2023, the finance ministers of Niger, Mali, and Burkina Faso discussed forming a monetary union, and Niger’s junta leader, Abdourahamane Tiani, has echoed the need for a currency shift. However, Mali’s finance minister in early 2024 noted the country’s continued UEMOA membership, suggesting uneven commitment within the AES. Economists warn that abandoning the CFA franc poses significant risks—such as managing existing CFA-denominated debt, ensuring convertibility, and maintaining economic stability—especially for agricultural economies with limited industrial bases.

The push reflects broader anti-French sentiment and a desire for self-determination, but the practical challenges are steep. A new AES currency would require robust institutions, coordinated policies, and likely years of preparation to avoid economic turbulence. For now, the statement is more a declaration of principle than a finalized policy, resonating with those who see the CFA franc as a colonial relic, yet leaving open questions about execution. Moving away from the CFA franc, which is pegged to the euro and backed by France, could destabilize the economies of Niger, Mali, and Burkina Faso. A new currency would lack the inherited credibility of the CFA, potentially leading to inflation, exchange rate volatility, and loss of investor confidence.

Much of the AES countries’ public and private debt is denominated in CFA francs. A new currency could complicate repayment, especially if it depreciates rapidly, increasing the real cost of servicing euro-linked obligations. The CFA franc facilitates trade within the UEMOA zone and with Europe due to its stability and convertibility. A new AES currency might weaken regional trade ties, particularly if neighboring countries remain on the CFA, creating exchange barriers. While a local currency offers control over monetary policy—potentially allowing AES states to print money or adjust interest rates to suit domestic needs—it sacrifices the stability provided by the CFA’s euro peg.

These nations, reliant on agriculture and raw material exports e.g., Niger’s uranium, may struggle to manage external shocks without a strong institutional framework. Designing, producing, and distributing a new currency, alongside building independent central banking systems, would demand significant resources—resources these countries, already strained by conflict and sanctions, may not have readily available. Exiting the CFA franc could bolster domestic support for AES military regimes by framing it as a rejection of colonial legacies, tapping into widespread anti-French sentiment. This could solidify their legitimacy amid political instability.

The move risks deepening divisions in West Africa. ECOWAS and UEMOA, already weakened by the AES exit from the former, could face further strain if a rival monetary bloc emerges, undermining decades of regional integration efforts. Not all stakeholders may support this shift. Urban elites, businesses tied to international trade, and populations accustomed to the CFA’s reliability might resist, creating internal tension or unrest. A successful exit would mark a significant blow to France’s economic and political leverage in the Sahel, accelerating its waning influence as AES states pivot toward partners like Russia, China, or Turkey, who have already increased military and economic engagement in the region.

The AES might seek technical and financial support for a new currency from non-Western powers. Russia, for instance, could offer backing as part of its broader strategy to counter Western influence in Africa, though its own economic constraints might limit this role. If the AES succeeds, it could inspire other CFA-using nations—like Senegal or Cote d’Ivoire—to reconsider their monetary arrangements, potentially destabilizing the broader CFA zone and prompting a wider reconfiguration of African economic alignments. Economic instability from a botched currency transition could exacerbate security challenges—such as insurgencies linked to Boko Haram or ISWAP—by straining budgets for military and social programs, especially if Western aid tied to ECOWAS or French partnerships dries up.

The AES’s ambition reflects a global trend of nations seeking greater autonomy in a multipolar world, but the practical hurdles are daunting. Ghana’s cedi and Nigeria’s naira, both independent currencies, have faced depreciation and inflation pressures, offering cautionary tales. Success hinges on the AES’s ability to coordinate policies, build trust in a new currency, and secure external backing—all while managing ongoing crises like jihadist insurgencies and food insecurity. Failure, conversely, could deepen poverty and isolation, making the statement’s bold vision a double-edged sword. For now, the implications tilt toward disruption, with the outcome depending on execution rather than intent alone.

Taiwan Semiconductor Manufacturing Co. (TSMC) could be fined more than $1 billion by the U.S. Department of Commerce following revelations that it unwittingly supplied a compute chiplet used in Huawei’s Ascend 910-series AI processor.

If the penalty is handed down, it will rank among the largest ever imposed under U.S. export control laws — a reflection not only of the volume of chips allegedly transferred but of Washington’s growing alarm over what it sees as systematic efforts by Chinese companies to bypass its sanctions regime.

Reuters, citing sources close to the matter, reported that the fine is being considered under U.S. rules that allow penalties of up to twice the value of any unauthorized transactions. While no formal charges have been filed against TSMC yet, the Commerce Department typically initiates such proceedings with a proposed charging letter that lays out the violations, financial estimates, and a deadline for response — usually within 30 days.

The alleged infraction involves a compute chiplet TSMC believed it was manufacturing for Sophgo, a relatively obscure Chinese firm with ties to cryptocurrency mining hardware company Bitmain. The chiplet was later discovered inside Huawei’s Ascend 910-series processor — an advanced AI chip that would normally require export licenses due to Huawei’s inclusion on the U.S. Entity List since mid-2020. That list prohibits U.S.-based firms and foreign companies using U.S. technologies from selling to Huawei without a license.

When reverse engineering firm TechInsights exposed the use of TSMC’s chiplet in Huawei’s hardware last year, it forced the Taiwanese semiconductor giant to halt all shipments to Sophgo. But by that time, a significant number of units had reportedly been delivered. Some analysts estimate that Huawei may have procured millions of chiplets through the arrangement.

Deception and the Difficulty of Detection

TSMC has maintained that it was not aware that Huawei was the true end user. The company claims that chip manufacturers like itself often cannot trace the ultimate origin or purpose of a chip design submitted for fabrication — particularly when the intermediary is an ostensibly independent third party like Sophgo.

Yet the complexity of the chip in question raised eyebrows. The chiplet incorporated tens of billions of transistors — an undertaking that would typically involve massive R&D budgets, design sophistication, and long lead times. For such a high-end chip to originate from a little-known company with links to a bitcoin mining hardware maker should have drawn more scrutiny, officials familiar with the investigation believe.

The U.S. Commerce Department, which has made blocking China’s access to cutting-edge AI technology a cornerstone of its national security strategy, is said to be especially incensed by the Sophgo-Huawei link. One source told Reuters that officials view the episode not as a technical oversight but as a test of the enforcement teeth behind America’s export controls.

The situation mirrors a 2023 case involving Seagate, which was fined $300 million for shipping $1.1 billion worth of hard disk drives to Huawei. At the time, it was the largest standalone penalty issued for violating U.S. export rules — a record the TSMC case may now eclipse.

Huawei’s Network of Proxies

The broader concern in Washington is the growing sophistication of Huawei’s tactics to circumvent sanctions. Sophgo is just one of several entities now suspected of operating as a front for the embattled tech giant. By outsourcing chip design to proxy firms and obscuring the real purpose of the hardware, Huawei is reportedly able to keep importing high-performance semiconductors despite being blacklisted.

A source familiar with the investigation described the Chinese firm’s strategy as “layered deception.” Huawei doesn’t just obscure its own involvement — it reportedly helps its partners disguise theirs, from design to manufacturing to packaging. The goal is to ensure that even if one intermediary is caught, the pipeline remains intact through others.

In January this year, Sophgo was also added to the U.S. Entity List, a move that further suggests U.S. authorities now see it as part of a larger subterfuge network.

TSMC’s Damage Control

Since the scandal broke in late 2024, TSMC has moved to tighten internal compliance. In addition to cutting ties with Sophgo, the company ended its relationship with PowerAIR, a Singapore-based firm that also raised red flags during an internal audit. PowerAIR’s business structure and transactions reportedly bore similarities to the Sophgo arrangement, prompting a proactive severing of ties before any violations could occur.

TSMC is also said to be working closely with the Commerce Department on the matter, though it remains unclear whether the company will try to contest the fine or seek a settlement.

Some industry experts believe that TSMC is as much a victim in this situation as it is a potential violator. The company relies on chip designs from thousands of global clients and has limited visibility into end-user intentions, especially when those clients go to great lengths to hide them.

But that argument may hold little sway in Washington. For U.S. officials, the concern is less about who knew what, and more about whether U.S. technology continues to fuel China’s military and surveillance ambitions despite the export rules.

A Growing Chill in U.S.-China Tech Relations

The TSMC episode comes at a time of heightened tension between the United States and China over technological supremacy. The Biden administration intensified restrictions on the export of AI chips, semiconductor manufacturing equipment, and advanced lithography tools to Chinese firms while urging allies like the Netherlands, South Korea, and Japan to follow suit.

TSMC, as the world’s most advanced chipmaker, is at the heart of this geopolitical crossfire. It has factories in both Taiwan and the U.S. and counts both American and Chinese firms among its major clients. As such, it walks a tightrope between satisfying Washington’s security concerns and preserving its business in Asia. The potential billion-dollar fine underscores the risks of that balancing act and the high cost of getting it wrong.

TSMC is currently waiting for an official notice. However, the implications are already reverberating through the global chip industry, where suppliers are now scrambling to verify clients and screen for red flags. The message from Washington is clear: if you help Huawei, even by accident, you will pay the price.

As President Donald Trump’s latest round of tariffs took effect at midnight of April 9, the spotlight beams on Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest contract chipmaker, and its promise to pour $165 billion into U.S. manufacturing.

Speaking at a Republican National Congressional Committee event on Tuesday, Trump boasted that he strong-armed TSMC into this commitment with a blunt ultimatum: build plants here or face a tax of up to 100%.

“TSMC, I gave them no money,” he declared, contrasting his approach with the Biden administration’s $6.6 billion grant to the company’s Arizona subsidiary. “All I did was say, if you don’t build your plant here, you’re going to pay a big tax.”

The tariff policy, hitting over 180 countries with rates like 104% on China and 32% on Taiwan, is Trump’s signature weapon in his “America First” crusade to resurrect domestic manufacturing. TSMC’s response—a $100 billion pledge in March 2025 to build five new factories, two advanced packaging facilities, and an R&D center in Arizona, on top of a $65 billion earlier investment—has been hailed by the White House as proof it’s working.

Commerce Secretary Howard Lutnick, speaking on March 3, said TSMC’s move was about dodging tariffs to stay in “the greatest market in the world.” The company’s CEO, C.C. Wei, nodded to Trump’s vision during a White House announcement, projecting 25,000 American jobs from the expansion.

But beneath the bravado lies a tangle of challenges that could derail this vision. From regulatory snags and labor shortages to a looming $1 billion penalty over a chip found in Huawei’s hands, TSMC’s road to making chips in the U.S. is anything but smooth. As the tariff clock ticks, experts and insiders question whether Trump’s push can deliver—or if it’s a high-stakes bluff that risks backfiring.

A Tale of Tariffs and Grants

Trump’s narrative is clear: tariffs, not handouts, brought TSMC to heel. He’s dismissed the $6.6 billion CHIPS Act grant, part of Biden’s $52.7 billion plan to boost U.S. chipmaking, as unnecessary largesse for a company he calls “loaded.” The Arizona project, centered in Phoenix, started with that grant and $5 billion in loans, kicking off the construction of three factories, the first of which began producing chips in 2024. The latest $100 billion infusion, unveiled on March 3, 2025, adds five more fabs and ups the ante to $165 billion—the largest foreign investment in U.S. history, per TSMC’s own press release.

However, the credit fight obscures a murkier truth. TSMC’s initial move leaned on Biden’s incentives, de-risking a $65 billion bet on a country with no track record for advanced chip production. Trump’s tariffs, effective today, pile on pressure with a 32% rate on Taiwanese imports—steep, though shy of the threatened 100%.

TSMC’s CFO, Wendell Huang, told CNBC in January that CHIPS funding would likely continue under Trump, tied to milestones. But Lutnick’s April 2 hint that he might withhold grants to squeeze out more investment adds uncertainty. Is TSMC here because of Trump’s stick, Biden’s carrot, or both? Analysts say it’s a mix, with market demand—65% of TSMC’s 2023 revenue came from U.S. clients like Apple and Nvidia—also in play.

The Arizona Experiment

TSMC’s Arizona venture is a test case for Trump’s vision, but it’s hitting speed bumps. Fab 21, the first plant, was slated for 2024 production but slipped to 2025, while a second facility slid from 2026 to 2027-2028, per CNN. Why? Construction delays, for one—permits here take twice as long as in Taiwan, bogged down by red tape and union pushback over safety and staffing.

“The U.S. isn’t built for this yet,” says Mark Liu, a former TSMC chairman, in a Reuters interview. “Taiwan’s ecosystem is decades ahead.”

Then there’s the workforce. TSMC shipped 600 American engineers to Tainan for training, but many returned frustrated—training was light on hands-on work, heavy on language barriers (Mandarin and Taiwanese dominate), and reliant on Google Translate, per Rest of World. Of 2,200 workers at the Phoenix site, half are Taiwanese transplants, sparking cultural friction. Americans chafe at what they call rigid hierarchy; Taiwanese see U.S. hires as less committed. Turnover’s a problem—dozens quit before training ended, and TSMC’s Glassdoor rating lags at 3.2 out of 5, compared to Intel’s 4.1.

“Trump’s forcing jobs here—it’s about time,” says Mike Torres, a local contractor eyeing TSMC work.

But Sarah Nguyen, an engineer who trained in Taiwan, quit after six months. “The culture clash was brutal, and the pay didn’t match the hassle,” she says.

In Taipei, concern grows—Taiwan’s economy leans on TSMC, and a U.S. shift stokes fears of lost dominance, per South China Morning Post.

Costs are another hurdle. U.S. wages dwarf Taiwan’s, and compliance with labor and environmental rules jacks up expenses.

“This is a geopolitical bet, not an economic one,” notes a Financial Times analysis.

TSMC’s betting clients like Apple will pay more for U.S.-made chips, but with profits already squeezed—65% of revenue tied to American demand, there’s little room to maneuver. Supply chains, too, are thin; Asia’s dense network of suppliers doesn’t exist here, risking disruptions.

Tech Lag and Huawei’s Shadow

Perhaps most worrying, TSMC’s U.S. plants might not get its cutting-edge tech first. CEO Wei told Reuters in January that Taiwan would lead on innovations like 2nm chips, leaving Arizona a step behind. For a company serving tech giants racing for AI dominance, that’s a competitive risk Trump’s tariffs can’t fix.

Then there’s the Huawei mess. On April 8, Reuters broke news of a U.S. export control probe that could slap TSMC with a $1 billion-plus fine. A chip it made for Sophgo, a Chinese firm, ended up in Huawei’s Ascend 910B AI processor—violating U.S. bans on the blacklisted tech giant. TSMC cut ties with Sophgo and self-reported, but the damage lingers.

“This could chill U.S.-TSMC ties at the worst time,” warns a Bloomberg source. With national security hawks circling, it’s a wild card in Trump’s chipmaking gamble.

Trump’s push echoes his iPhone obsession—another tech trophy he wants to be made in America. But like Apple’s China-centric supply chain, TSMC’s Taiwan roots run deep. The U.S. has cash (Intel got $8.5 billion, Samsung $6.4 billion from CHIPS) and demand, but not the ecosystem. Qualcomm’s CEO, Cristiano Amon, cheered TSMC’s move as “music to our ears” on March 4, yet diversification, not relocation, is the real goal.

The Trump administration has long been fixated on the vision of bringing iPhone manufacturing back to American soil. This ambition, rooted in a broader “America First” economic agenda, aims to revitalize domestic manufacturing and reduce reliance on foreign production, particularly from China.

The idea has gained renewed momentum as the administration escalates its tariff war, imposing steep levies on imports from key manufacturing hubs like China, Vietnam, and India. President Donald Trump and his team, including White House press secretary Karoline Leavitt and U.S. Commerce Secretary Howard Lutnick, have repeatedly pointed to Apple’s recently announced $500 billion U.S. investment plan as evidence of confidence in this vision.

Leavitt has argued that products like the iPhone could realistically shift to U.S. manufacturing, stating, “If Apple didn’t think the United States could do it, they probably wouldn’t have put up that big chunk of change.”

Lutnick has echoed this optimism, envisioning “millions and millions of human beings screwing in little screws to make iPhones” on American factory floors. However, this narrative collides with stark economic and logistical realities, rendering the dream of a Made-in-the-USA iPhone both impractical and prohibitively expensive in the near term. As tariffs intensify, Apple is instead scrambling to pivot its production to India, where labor and production costs, while not as low as China’s, offer a viable alternative to mitigate the financial fallout.

The Tariff War Boosting the U.S. Manufacturing Dream

The Trump administration’s tariff strategy, dubbed “reciprocal tariffs,” targets over 180 countries, with China facing a staggering 104% rate (including a pre-existing 20% levy), Vietnam at 46%, and India at a comparatively lower 26%. Effective as of midnight on April 9, 2025, these measures are designed to pressure companies like Apple to reshore manufacturing by making imported goods prohibitively expensive.

The administration sees the iPhone—a globally iconic product designed in California but assembled abroad—as a symbolic prize. Trump has explicitly tied Apple to this agenda, claiming during his tariff announcement that “they’re going to build their plants here.” This rhetoric aligns with his first-term efforts, where he successfully persuaded Apple to secure exemptions on certain products, and it reflects a belief that high tariffs will force a return to a bygone era of American industrial dominance.

The White House has leaned heavily on Apple’s $500 billion U.S. investment pledge, announced in February 2025, as proof of progress. This plan includes building an AI server factory in Texas and sourcing more parts from U.S. suppliers. Leavitt has seized on this, arguing that it demonstrates Apple’s faith in American labor, resources, and workforce capabilities.

Yet, analysts have tempered this enthusiasm, noting that the investment is “in line with what one might expect the company to be spending anyway,” rather than a radical shift toward mass iPhone production in the U.S. The tariff war has undeniably given this narrative a boost, but the practical challenges of making iPhones at home reveal a far more complex picture.

The Unaffordable Reality of U.S.-Made iPhones

Despite the administration’s fervor, producing iPhones in the United States faces insurmountable hurdles that would render them unaffordable for most consumers. Steve Jobs articulated this dilemma over a decade ago during meetings with then-President Barack Obama in 2010 and 2011, as detailed in Walter Isaacson’s biography. Jobs explained that Apple’s 700,000 factory workers in China were supported by 30,000 on-site engineers—a scale of skilled labor unavailable in the U.S.

“You can’t find that many in America to hire,” he told Obama.

Tim Cook reinforced this in 2017 at Fortune Magazine’s Global Forum, noting that China’s advantage lies not in cheap labor but in its “skill and the quantity of skill in one location.” He contrasted the U.S., where “you could have a meeting of tooling engineers, and I’m not sure we could fill the room,” with China, where “you could fill multiple football fields.”

The economics underscore this gap. Labor costs in the U.S. are significantly higher than in China or India, and the specialized workforce required for iPhone assembly doesn’t exist at the necessary scale domestically. Even if Apple attempted to train such a workforce, the process would take years and billions of dollars—far beyond the Trump administration’s timeline. Estimates of a fully U.S.-made iPhone’s cost have ranged wildly, with a 2018 Quora post suggesting $30,000 and a recent Reuters analysis pegging a tariff-impacted iPhone at $2,300.

While these figures are speculative, they highlight a consensus among economists and manufacturing experts: domestic production would drastically inflate prices. Rosenblatt Securities estimates that absorbing current tariffs without raising prices could cost Apple $39.5 billion annually, slashing operating profits by nearly 32%. Passing those costs to consumers could push the iPhone 16 base model from $799 to $1,142—a 43% hike—while the iPhone 16 Pro Max might hit $2,300, up from $1,599.

Beyond labor, the iPhone’s global supply chain complicates the picture. Components come from Japan, South Korea, Taiwan, and elsewhere, with rare earths mined across dozens of countries. Assembling these in the U.S. would require either importing them (subject to tariffs) or building entirely new domestic supply chains—an endeavor that could take decades.

Trump’s vision assumes every company restores simultaneously, but this would strain resources, exacerbate supply chain bottlenecks, and deepen the shortage of skilled workers. The result would be an iPhone so expensive it risks alienating Apple’s customer base, giving competitors like Samsung (facing a lower 25% tariff from South Korea) a market edge.

Apple’s Pivot to India Amid Tariff Pressure

Faced with these realities, Apple is not doubling down on U.S. production but rather accelerating a shift to India, where labor and production costs rank second only to China. The company has been diversifying its supply chain since 2017, initially assembling older iPhone models in India through partners like Foxconn, Tata Electronics, and Pegatron. By fiscal year 2024, India accounted for 14% of global iPhone production—about 25 million units—and exported nearly $9 billion worth to the U.S. With China’s 104% tariff dwarfing India’s 26%, the economic incentive to ramp up Indian output is clear.

Posts on X and reports from outlets like The Times of India indicate Apple is already acting, shipping five planes of iPhones from India to the U.S. in late March 2025 to beat the April 5 tariff deadline.

India offers a compelling alternative. Its labor costs are lower than the U.S., and its government has bolstered manufacturing with incentives like the Production Linked Incentive (PLI) scheme, disbursing nearly $1 billion to Apple’s partners since 2022. Foxconn plans to produce 25-30 million iPhones in India in 2025, doubling last year’s output, while Apple aims to hit 15-20% of total iPhone production by year-end, per Bernstein analysts.

However, India isn’t a perfect solution. Its manufacturing ecosystem lacks China’s scale and maturity, with a 6-7% higher production cost disability, according to industry estimates. Scaling to China’s level—where 90% of iPhones and 80% of iPads are assembled—could take years, and the 26% U.S. tariff still stings. But the 28-percentage-point tariff gap with China makes India the “least bad” option, as one industry official put it. Apple is also starting AirPods production in India this month, further signaling a long-term commitment.