Trump’s Plan for the CHIPS Act: Future Changes for U.S. Semiconductor Policy
As Donald Trump approaches a potential return to the presidency following the 2024 election, speculation grows about whether or not Trump will uphold the CHIPS Act. The Act was introduced by Biden Government to aid the growth of semiconductor and chip manufacturing as well as high tech research.
After the victory, Trump will focus on executing significant changes in the Big Tech, AI industry, and Tesla, making them more profitable.
CHIPS Act: A Key Policy Under Scrutiny
One major legislation that would be under the scrutiny of Trump would be the CHIPS Act, enacted under the Biden administration in 2022. The act was supported by both parties initially. But it faced immense criticism from Trump, who disapproved of its high price tag during his campaign.
Despite Trump’s critical stand on the act, experts say that Trump will uphold the CHIPS Act after taking office. According to a CNBC report, industry experts believe that the policy’s impact on Asian semiconductor giants like TSMC and Samsung can make the Trump administration to uphold the CHIPS Act.
Trump’s Take on Semiconductor Policy
On November 7, 2024, Paul Triolo, Senior Vice President for China and Technology Policy at Albright Stonebridge, shared his perspective on CNBC’s “Squawk Box Asia,” in spite of being “not” thrilled about the CHIPS Act, Trump’s government will uphold the act. Triolo further added. “There’s support for this kind of onshoring of advanced manufacturing.”
Signed by the Biden administration in 2022, the bipartisan CHIPS and Science Act committed $53 billion to semiconductor research and domestic manufacturing. The investment aimed to strengthen the U.S. position against China.
However, Trump previously labeled the act a “bad” deal, saying that applying tariffs on chips imported from Taiwan rather than using federal funds to support companies is a better strategy.
During a podcast with Joe Rogan, Trump stated, “We put up billions of dollars for rich companies to come in and borrow the money to build chip facilities here, and they’re not going to give us the good companies anyway.”
Changes Expected, But Core Elements Likely to Remain
The US CHIPS Act offers funds worth $6.6 billion and $6.4 billion allocated to TSMC and Samsung, respectively, for setting up U.S. facilities. Despite concerns about the act’s cost, industry analysts expect Trump’s administration to retain much of it, though with possible adjustments to funding priorities and allocations.
The amendments to the CHIPS Act is one of the major changes that Trump could make after returning to presidency in January 2025. The modifications may involve shifting funds to align better with priorities of Trump’s government rather than reducing overall support but will keep most of it intact.
Adam Posen, President of the Peterson Institute for International Economics, told CNBC’s “Squawk Box Asia,” “The Trump administration will try to reinterpret the bill, so they can spread the money a little differently than Biden, but I don’t think they’re going to roll it back.”
Posen further highlighted that Trump’s approach might resemble Biden’s retention of tariffs on Chinese imports, which were initially introduced during Trump’s first term. He added, “But I do think there’ll be much more expansion on the tariff front, rather than industrial policy expanding.”
