House Passes Bill Promoting Semiconductor Development

A semiconductor manufacturing facility in New York. (Adam Glanzman/Bloomberg News)

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The U.S. House of Representatives on Feb. 4 passed an expansive bill that would invest tens of billions in the U.S. tech sector, but Republican objections that it’s too weak on China threaten what Democrats hoped would be a quick election-year win.

The bill started as a bipartisan push to bolster U.S. manufacturing and research, and ease the dependence on China for semiconductors, but it became mired in long-standing partisanship over U.S. policy on China.

The 222-210 vote, coming as the Winter Olympics opened in Beijing, fell mostly along party lines. But a final version of the legislation still has to be negotiated with the Senate, where Republicans wield filibuster power, and could be months away. China criticized the Senate’s version of the bill, passed in June with bipartisan support, with Beijing arguing the U.S. should not make China an “imaginary enemy.”



China’s rising economic power and global influence have been a focus for three successive presidential administrations and the subject of bipartisan angst in Congress, but the two parties’ tactics have differed widely. Former President Barack Obama emphasized engagement and building relationships in the Pacific region, while former President Donald Trump used tariffs and tough rhetoric even as he deployed personal diplomacy with Chinese leader Xi Jinping.

President Joe Biden’s administration, focused on his domestic agenda and the pandemic, hasn’t written its China trade policy yet. In January, Biden said he’d like to lift Trump-era tariffs, but “we’re not there yet.”

The lingering partisan friction had been on display during the debate on the House bill.

Democrats have emphasized the bill’s domestic benefits, including $45 billion over six years for a new Supply Chains for Critical Manufacturing Industries Fund and $52 billion over five years to support semiconductor production.

The bill also authorizes $8.8 billion this year for Energy Department research and development programs, with that amount increasing each year through fiscal 2026. And it authorizes as much as $8 billion to help developing countries address climate change over the next two years and another $2 billion annually to help developing countries deploy clean energy technologies, expand zero-emission vehicles, promote sustainable land use, and adapt to the effects of climate change.

Republicans — even those whose districts stand to gain from the infusion of semiconductor money — criticized the bill on multiple points, including what they called a “slush fund” for climate programs.

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They also argued the bill does too little to keep U.S. technology out of the hands of the Chinese military or taxpayer money from supporting China’s own green energy industry.

Commerce Secretary Gina Raimondo, after meeting with House Democrats on Feb. 1, dismissed talk that a final two-chamber agreement and passage of a U.S.-China Competition bill might not occur until Memorial Day. She suggested it is Republicans who are playing politics.

“We ought to be able to have a swift, efficient conference process, reconciling the differences,” Raimondo said.

— With assistance from Eric Martin, Daniel Flatley and Zach C. Cohen.

 

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