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Former President Donald J. Trump on Friday blasted the CHIPS and Science Act, a bipartisan law aimed at reducing America’s reliance on Asia for semiconductors by providing billions in subsidies to encourage companies to manufacture more chips in the United States.
“That chip deal is so bad,” Mr. Trump said during a nearly three-hour episode of “The Joe Rogan Experience.” “We put up billions of dollars for rich companies.”
Mr. Trump argued that the federal government could have imposed a series of tariffs to make chip manufacturers spend more of their own money to build plants in the United States. He also argued that the law would not make the “good companies” invest in the United States.
“You didn’t have to put up 10 cents,” Mr. Trump said. “You tariff it so high that they will come and build their chip companies for nothing.”
That argument does not take into account how reliant the United States is on foreign nations for chips, particularly those made in Taiwan. Semiconductors have become critical to the U.S. economy, given that they are used in everything from cars to weapons systems and computers. Yet only about 10 percent of the world’s semiconductors are produced in the United States, down from about 37 percent in 1990.
America’s heavy reliance on Taiwan’s semiconductors has been a growing source of concern among U.S. officials, given China’s ongoing threats to invade the self-governing island.
During the podcast episode, Mr. Trump criticized Taiwan, saying that “they stole our chip business.” And he compared its relationship with the United States to a mob-like protection racket.
“They want us to protect, and they want protection,” Mr. Trump said. “They don’t pay us money for the protection, you know? The mob makes you pay money, right?” He added, “When I see us paying a lot of money to have people build chips, that’s not the way.”
The goal of the CHIPS Act, which President Biden signed into law, is to ramp up the domestic supply of semiconductors. The law gave the Commerce Department $39 billion to distribute as grants and includes federal tax credits that could cover 25 percent of the cost of building and outfitting factories with production equipment.
The Biden administration has awarded more than $30 billion to companies so far, though the vast majority of the funding has not been distributed yet. All five of the world’s leading-edge semiconductor manufacturers have been promised funding, including Intel and Taiwan Semiconductor Manufacturing Company, the leading maker of the most advanced microchips.
T.S.M.C. will receive up to $6.6 billion in grants to support the construction of its first major U.S. hub, in Phoenix. The company plans to spend more than $65 billion on the project, which is expected to create about 6,000 direct manufacturing jobs.
Officials from Vice President Kamala Harris’s campaign criticized Mr. Trump’s remarks and argued that his policies would hurt U.S. manufacturing jobs.
“Donald Trump is threatening to defund and dismantle thousands of manufacturing jobs across the country with an agenda that is so much more extreme and unhinged than anything we saw in his first term,” Joseph Costello, a spokesman for the Harris campaign, said in a statement. “Vice President Harris will cut taxes and create opportunity to help the middle class get ahead.”
The Biden administration has also argued that the CHIPS Act is crucial for strengthening national security and building up a reliable supply of semiconductors. America’s reliance on foreign chips became a huge problem during the pandemic, when factories overseas shuttered to prevent the virus from spreading. Automakers and other companies were unable to get the chips they needed, which led to a surge in prices for cars and other products as demand far outpaced supply.
Anna Kelly, a spokeswoman with the Republican National Committee, defended Mr. Trump's comments.
“In his first term, President Trump lowered taxes for American manufacturers that produced goods in the U.S.A. and imposed tariffs to level the playing field for American companies,” she said. “There is a reason that tech leaders like Elon Musk are backing President Trump: They know that only he can end our dependence on foreign supply chains and restore America’s place as the manufacturing center of the world.”
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