U.S. Lawmakers Pass COMPETE Act to Support Chip Manufacturing

The U.S. House of Representatives passed on Friday the $300 billion America COMPETES Act directed at supporting technological investments to compete with rivals in its semiconductor manufacturing. 

The Act will deliver extensive subsidies for manufacturing and research, all while improving the pre-existing U.S. trade policy as the country stands in a manufacturing face-off with China’s hasty growing technological influence in the East and globally.

After passing in the House in a 222-210 vote, also referred to as the “China Competition Bill,” will provide economic support such as the $52 billion, strictly to finance American semiconductor manufacturing. This will play a critical role in placing the U.S. at the forefront of being less dependent on Chinese chip manufacturing while empowering the country’s capacity in self-manufacturing.

In parallel, the Act will also fund new semiconductor manufacturing plants, alongside the pre-existing ones, such as Qualcomm and Apple’s leading manufacturer, TMC, which is currently in the plan of building a factory in Arizona.

The New York Times drew attention to the matter that the bill is unlikely to be passed in the near future, given that lawmakers have yet to reach an agreed-upon compromise. Currently, Republicans and Democrats seem to be torn between each other, leaving the bill weak facing China, in addition to having a wave of redundant provisions directed at conservation and sustainability incentives.

In a Press Conference on Friday, House Speaker Nancy Pelosi expressed that the Act “will ensure that America is preeminent in manufacturing, innovation and economic strength and can outcompete any nation.”

On another part, Pennsylvanian Democratic, Representative Madeleine Dean, referred to the COMPETE Act 2022 as an “opportunity to revitalize communities across our nation that gave suffered substantial manufacturing job losses for decades.”

Despite U.S. House Representatives showing immense hope for the bill, various Grand Old Party legislators claim that some lawmakers from the Democratic party are outbid Chinese influence to empower and place a much more fortified stronghold for the U.S. concerning global dominance in the global technological market.

Experts also believe that the bill will fail to bring forth punitive actions to hold China for its conduct in the semiconductor market and impose harsher influence on U.S. companies dealing with Chinese manufacturing factories.

“It wastes billions of dollars on unrelated matters and includes no measures to make China pay for the chaos they created,” Representative Kevin McCarthy, and minority leader, told The New York Times.

President Joe Biden’s office has already praised the Act’s passing, now waiting to be reconciled with the U.S. Innovation and Competition Act (USICA), which passed to the Senate mid last year, June 2021.

The USICA has already closed in House support to be issued to the White House, leaving the Congress to initiate the next step, structuring a bill to be sent for the President’s signature. But despite all that, deeply embedded ideological differentiation between the Republican and Democratic parties could leave the bill in a state of disarray, threatening potential negotiations, also including Beijing.

Following the Act’s passing announcement, President Biden advised Congress to intensify their efforts into reaching a compromise and delivering the bill to the White House.

“I look forward to the House and Senate quickly coming together to find a path forward and putting a bill on my desk as soon as possible for my signature,” the President expressed in a White House briefing.

“America can’t afford to wait,” he added.