On July 27th, the U.S. Senate approved sweeping legislation to assist the local semiconductor industry in an effort to help businesses and curtail Chinese dominance in the sector. President Joe Biden hopes to sign it into law as early as Tuesday, August 9th.
This policy was constructed to compete with international powerhouse countries such as China to ease a chronic shortage that has negatively impacted everything from cars, guns, household appliances, and interactive media, and contributed to global inflation .
The “Chips and Science” act grants around $52 billion in government subsidies for American semiconductor production, along with a $24 billion investment tax credit for chip factories.
Additionally, it would approve roughly $200 billion over five years for American scientific research in an effort to compete with China. Only 24 House Republicans voted in favor of it. The vote was not as nonpartisan as it was in the Senate.
Also, more than $170 billion over five years would be authorized by the measure to advance American scientific research and make it more competitive with China. The funding for those investments would still require separate appropriations legislation from Congress.
According to Chuck Schumer, the Democratic majority leader in the Senate,”This legislation is going to create good paying jobs, it will alleviate supply chains, it will help lower costs, and it will protect America’s national security interests.”
The Chinese Embassy did not take kindly to the bill and claimed the law was “entrenched in the Cold-War and zero-sum game mentality and runs counter to the common goal of people from all sectors in China and the US to increase contacts and cooperation,”
China “firmly opposed” the bill by lobbying against it heavily.
Critics have referred to the legislation as a “blank check” to very lucrative chip manufacturers. Including Senator Bernie Sanders, who was the lone senatorial Democrat to vote against the policy, “At a time when the working families of this country are falling further and further behind while the very rich are getting much richer, let us get our priorities right,” explained Sen. Sanders.