President Donald Trump's recent call for the termination of the CHIPS and Science Act, a significant piece of legislation supporting U.S. semiconductor manufacturing, has stirred unrest among Senate Republicans.
The Washington Examiner reported that despite Trump's assertive remarks, the CHIPS and Science Act's repeal is improbable due to its strong bipartisan support in 2022.
During a joint address to Congress, Trump expressed his desire to end the financial support provided by the CHIPS and Science Act, which offered $53 billion in subsidies to bolster semiconductor production.
The act was a major legislative effort passed in 2022 with substantial bipartisan backing, including votes from 17 Republican senators and 24 GOP representatives.
Sen. Todd Young (R-IN), a prominent supporter of the CHIPS and Science Act, reached out to the White House for clarification following Trump's surprising statement.
"I have to admit I was surprised," Young remarked, highlighting the tension between Trump's remarks and the assurances he had received from administration officials regarding the act’s continued support.
Senate Republicans, many of whom initially endorsed the legislation, are considering potential reforms but largely regard a wholesale repeal as unlikely. The act’s passage was seen as a crucial step in reinforcing U.S. technological edge and supply chain security.
While Speaker of the House Mike Johnson (R-LA) initially considered undoing the legislation, he later suggested revising its language instead.
The GOP Senate leadership, however, remains focused on addressing other pressing issues, including funding deadlines and the former president's proposals regarding tax and border policies.
Some Republicans are concerned about the implications of eliminating the CHIPS Act funding, especially in districts and states that have benefited from the subsidies. Sen. John Cornyn (R-TX) dismissed the feasibility of reversing the law, noting the significant number of Republicans who supported it.
Trump, on the other hand, argued that tariffs alone could attract investments from semiconductor manufacturers without requiring subsidies.
During a podcast in October, he insisted that high tariffs would compel companies to establish their operations in the U.S. without any financial support from the government, dramatically differing from the subsidy approach taken by the CHIPS Act.
Despite criticism, Young remained steadfast in his defense of the act, describing it as “one of the greatest successes of our time” due to its substantial economic impact.
The act has already spurred significant commitments from major players in the semiconductor industry. TSMC, a Taiwanese company, planned a $100 billion investment, showcasing the act's effectiveness in bolstering domestic manufacturing.
Sen. Lindsey Graham (R-SC) expressed openness to Trump's vision if it entails a different approach for bringing chip manufacturing to the U.S.
"I'd like to see what he'd want to replace it with," Graham said, demonstrating a readiness to consider new strategies. However, he affirmed his general support for increasing domestic chip production.
While some legislators, like Young, are open to evolving the act into a new model over time, the overarching expectation is that the administration will maintain its support for the initiative, which is viewed as a cornerstone for national security and supply chain resilience.
Future discussions among GOP members and with Trump will be crucial to determine the direction of semiconductor manufacturing policy in the U.S., especially given the complex geopolitical dynamics surrounding global supply chains.
Meanwhile, the debate within the party underscores the broader challenges of finding a unified stance on economic strategies that balance innovation, security, and fiscal responsibility.
