In late 2022, after lengthy legislative negotiations, then-President Joe Biden signed the CHIP Act, which provided $52 billion in subsidies for the American semiconductor industry. This week, Donald Trump called on the legislature to repeal the law.
Image Source: TSMC
«”This Chip Act of yours is a terrible, terrible thing,” current US President Trump told US House Speaker Mike Johnson, calling on him to “get rid” of the act and use the remaining funds for any suitable purpose, including partially paying off US foreign debt.
It should be noted that under Biden, about 85% of subsidies for the construction of chip manufacturing plants in the United States were distributed. The total budget reached $39 billion, of which $33.7 billion has already been guaranteed to specific recipients based on the agreements concluded with them. Another $2.7 billion remains undistributed, $1.9 billion has only been assigned to recipients tentatively, and $800 million had to be written off as administrative expenses. In total, about 20 companies, including foreign ones, managed to secure guarantees of subsidies under Biden, which Trump now wants to cancel. He considers customs duties to be the best way to stimulate the development of production in the United States.
Interestingly, Donald Trump even called for the Taiwanese company TSMC, which he had showered with affection yesterday, to be deprived of targeted subsidies: “We will not give them money.” It was not clear from the context of the president’s statement whether he was talking about the financing of new TSMC enterprises, which had already been agreed upon under Trump, or about the three enterprises that TSMC had agreed to build under Biden. The latter’s administration had formally managed to conclude an agreement with TSMC on the allocation of subsidies in the amount of $6.6 billion.
Commerce Secretary Howard Lutnick has made it clear that his department cannot begin distributing funds under the CHIP Act without a thorough review of the contracts awarded by the previous administration to potential recipients of the grants.