I see the point being made here, and yeah 5%-20% extra for what amounts to insurance against geopolitics isn't too bad, but doesn't this all fall apart when China catches up?

That 5%-20% is worth it now because no one else can fabricate competing chips. In a competitive market, 5%-20% can be the difference between having the price edge or not. I understand why the USA wants TSMC to manufacture outside of Taiwan, but perhaps it makes sense to move it not the USA but, say, Mexico?

Chinese car companies seem to be slowly but surely rolling American car companies in international markets with great value at low prices. The move in this market evidently isn't to move manufacturing away from Mexico at a 5%-20% increase in price.

In the chip market there's less immediate competition, but I can only imagine it'll come. Hopefully economies of scale would have removed this extra 5%-20% by the time China catches up?