**Causal Chain of Effects Following a 50% Tariff on Imported Microchips**

1. **Immediate Impact on Firms Relying on Microchips**  
   - **Rising Costs**: Companies in sectors like automotive and electronics face a sudden 50% increase in the cost of imported microchips, which are critical inputs.  
   - **Limited Substitution**: Domestic chip production is unlikely to scale immediately (due to high-tech barriers, lead times for factories, and potential quality gaps), forcing firms to absorb costs or seek alternatives.  
   - **Stockpiling and Uncertainty**: Some firms may rush to import chips pre-tariff, creating short-term volatility. Others may delay investments due to uncertainty.

2. **Consumer Prices and Demand**  
   - **Price Increases**: Higher production costs are passed to consumers, raising prices for electronics (computers, smartphones) and vehicles.  
   - **Reduced Demand**: Price elasticity determines the drop in consumption. Lower-income households bear disproportionate costs, potentially worsening inequality.  
   - **Inflationary Pressure**: Broad-based price hikes may contribute to inflation, prompting central bank scrutiny (e.g., interest rate hikes).

3. **International Response**  
   - **Retaliatory Tariffs**: Export-heavy trading partners (e.g., South Korea, Taiwan, U.S.) may impose tariffs on the country’s goods (e.g., agricultural products, machinery), harming domestic exporters.  
   - **Trade War Escalation**: Retaliation could trigger a cycle of protectionism, reducing global trade volumes and disrupting supply chains.  
   - **WTO Challenges**: Affected countries might file disputes, but resolution could take years.

4. **Medium-Term Employment Effects (1–2 Years)**  
   - **Domestic Tech Sector**:  
     - **Job Growth**: Tariff revenues and protected markets incentivize investment in domestic chip production. Employment rises in semiconductor plants, R&D, and ancillary industries.  
     - **Constraints**: Skilled labor shortages, high capital costs, and global competition may limit growth.  
   - **Dependent Sectors (Automotive/Electronics)**:  
     - **Job Losses**: Higher costs reduce competitiveness, leading to layoffs or automation. Some firms may offshore production to countries with cheaper chips.  
     - **Export Sectors**: Retaliatory tariffs cause job cuts in agriculture, manufacturing, and other export-dependent industries.  
   - **Net Employment**: Job creation in tech likely outweighs losses in other sectors only if domestic chip production scales rapidly (unlikely in 2 years). Overall employment may stagnate or decline.

5. **Longer-Term Structural Shifts (Approaching 2 Years)**  
   - **Partial Domestic Substitution**: A nascent domestic chip industry emerges, reducing reliance on imports but failing to meet full demand.  
   - **Industry Restructuring**: Electronics/automotive firms may redesign products to use fewer chips or lobby for tariff exemptions.  
   - **Trade Alliances**: The government might negotiate bilateral deals to ease tensions, but protectionism persists.

**Conclusion**: Over two years, the tariff reshapes the economy through higher consumer prices, job reallocation from traditional sectors to tech, and retaliatory trade measures. While the domestic chip industry gains a foothold, the broader economic costs (reduced consumer welfare, job losses in manufacturing/export sectors) likely outweigh benefits unless accompanied by targeted investments in skills, R&D, and infrastructure.