U.S. President Donald Trump has urged lawmakers to eliminate the CHIPS and Science Act, a 2022 bipartisan law that provides $52.7 billion in subsidies for semiconductor manufacturing and research. Trump made these remarks in a speech to Congress on Tuesday, arguing that the funds should instead be redirected toward reducing the national debt.
“Your CHIPS Act is a horrible, horrible thing. We give hundreds of billions of dollars and it doesn’t mean a thing. They take our money and they don’t spend it,” Trump stated. “You should get rid of the CHIPS Act and whatever is left over, Mr. Speaker, you should use it to reduce debt.”
Signed into law by then-President Joe Biden in August 2022, the CHIPS Act was designed to bolster domestic semiconductor production in response to global supply chain vulnerabilities, particularly the U.S.’s reliance on Asian manufacturers. The legislation allocated $39 billion in subsidies for chip production and an additional $13.7 billion for semiconductor research and workforce development.
Trump’s criticism of the act aligns with his broader economic stance, which prioritizes fiscal conservatism and reducing government expenditures. His call to repeal the CHIPS Act marks a stark contrast to the bipartisan support the law initially received. Proponents argue that the subsidies are crucial for maintaining technological competitiveness against China and securing the U.S. supply chain from external disruptions.
Senate Majority Leader Chuck Schumer defended the CHIPS Act, emphasizing its role in revitalizing American manufacturing and ensuring national security. “The CHIPS Act is bringing jobs back to America and making sure we are not dependent on foreign nations for critical technology,” Schumer said in response to Trump’s remarks.
Industry leaders have also pushed back against Trump’s call for repeal, noting that semiconductor manufacturers have already begun investing in new facilities based on the promise of government support. Companies like Intel, TSMC, and Micron have announced multi-billion-dollar investments in U.S. semiconductor plants, partially enabled by CHIPS Act incentives.
Trump’s stance on the CHIPS Act is likely to become a focal point of economic policy debates as the 2024 presidential election approaches. With semiconductor manufacturing at the heart of global technological competition, the future of the CHIPS Act could have far-reaching implications for the U.S. economy and national security.
