Trump Slams 'Horrible' US CHIPS Act And Makes A Case For Getting Rid Of It
The CHIPS Act sought to promote domestic research and semiconductor manufacturing through a program that gave subsidies of $52 billion to leading semiconductor companies like Intel, Samsung, Micron Technology and TSMC, among others. Intel, especially, was a big beneficiary of the plan. It was designed to reduce dependence on foreign supplies of electronic components by helping these companies expand their operations in the US.
President Trump has never been a fan of this program, which the CHIPS Act underpins, as he feels that the subsidy is unnecessary and a waste of resources. He greatly censured the CHIPS Act in his remarks to Congress on Tuesday. Referring to the speaker, he said, “Your CHIPS Act is a horrible, horrible thing.” He stated that companies are agreeing to make more investments in the US, not because of the money given to them but to avoid tariffs. This is likely about TMSC's decision to commit $165 billion to the US. Doubling down on his criticism, he added, “You should get rid of the CHIPS Act and whatever’s left over, Mr. Speaker, you should use it to reduce debt or any other reason you want to.”
Despite the president's strong disapproval of the Act, it's unlikely to be repealed because it has enjoyed much bipartisan support in its passage. Moreover, many states have secured significant investment commitments from these semiconductor companies due to the assurance provided by the subsidy program.
Reacting to Trump's statement, New York Governor Kathy Hochul observed that the law that the president wants to put an end to "is the reason Micron is bringing $100 billion and 50,000 jobs to Central New York.” Furthermore, companies such as Samsung Electronics Co and SK Hynix Inc have agreed to spend billions of dollars on projects in Texas and Indiana, as a result of the subsidized program.
That being said, there are concerns that the new administration may vary the terms of the subsidies offered to these companies. The new administration isn't committed to the program as it believes tariffs do the job better. Also, the federal government workforce reduction has affected some employees overseeing the program's implementation. While the Trump administration may not be able to garner support to abolish the Act due to bipartisan support, it could explore other means to stop the subsidies.
Top Image Credit: Whitehouse
