Trump's Call for CHIPS Act Repeal Faces Bipartisan Pushback

Trump Calls for Repeal of CHIPS Act, Faces Bipartisan Pushback

President Donald Trump surprised many on Tuesday when he called for the repeal of the $52 billion CHIPS Act, a bipartisan law designed to boost American semiconductor manufacturing. The legislation, which garnered support from both Republicans and Democrats, aims to reduce US reliance on foreign chip production, create domestic manufacturing jobs, and bolster competition with China.

Trump's request for repeal was met with resistance from both parties. Democrats, who played a key role in passing the bill, expressed strong opposition to its repeal. Senate Minority Leader Chuck Schumer emphasized the positive economic impact the CHIPS Act is already having across the country and stated that he doubts Trump will find much support for weakening the legislation.

Even among Republicans, there was hesitation to indulge Trump's demand. Several GOP senators who voted for the CHIPS Act expressed a desire to see more details from Trump before backing its repeal. Senator Lindsey Graham of South Carolina stated that he wants to bring chip manufacturing to the US, but is open to alternative approaches if Trump has a better plan.

Adding to the complexity of the situation, a significant portion of the CHIPS Act has already been implemented. Senator Todd Young, the Republican co-author of the bill, noted that the "chips portion" is mostly in motion and that he has reached out to the White House for clarification on Trump's position.

The Biden administration has already allocated over $33 billion in subsidies to semiconductor manufacturers and suppliers, and rescinding these funds would require an act of Congress. Senator Young expressed his expectation that the administration will continue to support this initiative, even if it needs to transform into a different model over time.

Despite the low likelihood of legislative repeal, Trump's comments could still have a negative impact on the semiconductor industry. Senator Ruben Gallego of Arizona warned that businesses considering relocating or expanding chip production in the US might hesitate if they believe the CHIPS Act funding is at risk. This could lead them to explore opportunities in other countries, potentially hindering the goals of the legislation.