Rebuilding our microchip manufacturing base is critical part of US national defense. Why in the world would Donald Trump and Speaker Mike Johnson want to repeal the CHIPS act?
The Affordable Care Act came with a lot of baggage (as similar plans had been advocated for decades by various proponents), and President Obama was arrogant and dismissive of any need for Republican buy-in (telling them they could take a back seat). CHIPS seems much less divisive, though it seems stalled (at least based on recent statements by Intel and other CEOs).
> […] and President Obama was arrogant and dismissive of any need for Republican buy-in (telling them they could take a back seat).
That is not accurate:
> Not only were Republican senators deeply involved in the process up until its conclusion, but it's a cinch that the ACA might have become law months earlier if the Democrats, hoping for a bipartisan bill, hadn't spent enormous time and effort wooing GOP senators — only to find themselves gulled by false promises of cooperation. And unlike Majority Leader Mitch McConnell's semi-secret proceedings that involved only a handful of trusted colleagues, Obamacare, until the very end of the process, was open to public scrutiny.
> We feel a tap on our shoulder and we look back, and who is it? It's the Republicans. And they say "Huh, excuse me, we'd like the keys back." And we have to tell them "I'm sorry, you can't have the keys back if you don't know how to drive". If you want you can ride with us but you have to ride in the back seat.
Further context: Oct. 22, 2010, in Las Vegas on behalf of Sen. Harry Reid's re-election campaign.
As a sibling comment notes: the Democrats had the majority at the time and were in charge of setting the agenda ("had the keys").
Further, Obama was willing to give the GOP a (figurative) ride if they wanted and were heading in the same direction.
Surely HN of all spaces would understand why giving free money to Intel is a massive waste? Also if they genuinely need the money, they should be offering ownership in return.
Trump didn’t seem to disagree with the premise just the funding. His argument is that the US shouldn’t be funding it. His strategy is to put tariffs on chip imports and foreign chip manufacturers would have to build US based plants on their own dime.
> His strategy is to put tariffs on chip imports and foreign chip manufacturers would have to build US based plants on their own dime.
The counter-argument (FWIW):
> Tariffs are paid by the importer and not the exporter. The Semiconductor Industry Association (SIA) claims that tariffs would not cause fabs to be built in the US, due to the cost of the factories, which can run from $18bn to $27bn.
> "No tariff amount will equal the costs of ripping apart these investments and efficient supply chains that have enabled current US industry leadership," SIA said.
> It added: "Moreover, chip tariffs will drive away manufacturing in advanced sectors that rely on semiconductor technology, such as aerospace, AI, robotics, next-generation networks, and autonomous vehicles. If the cost of key inputs like semiconductors is too high, tech manufacturers will relocate out of the US, costing jobs and further eroding US manufacturing and technological competitiveness."
Foreign chipmakers would not pay the tariff (contrary to what Trump thinks) but their US customers, and what incentive to the foreign chipmakers to make changes? They're getting the same money and it's not costing them a dime. And where else are US businesses going to go for the product?
Even if the exporters are not directly paying the tariffs, their chips will cost consumers more, reducing the demand. So no; they’re not getting the same money.
If you were talking about some discretionary thing, like magazines, I'd agree with you.
But customers don't buy chips, they buy stuff, and chips are in everything. There's the obvious (phones, tablets etc), but also everything else, like cars, washing machines, tvs, air fryers, plus more.
Clearly tarrifs drive (domestic) prices up, which will cause some level of inflation, but it will be across the board (not on "chips"). And clearly that will weaken demand.
But given global demand that will likely not be all that noticeable. Indeed it'll likely just result in US manufacturing being less competitive. Certainly it'll make US manufactured products more expensive on the world market.
Which likely leads to more American plants moving offshore, not onshore.
> Even if the exporters are not directly paying the tariffs, their chips will cost consumers more, reducing the demand. So no; they’re not getting the same money.
So the higher cost of cars—because they have chips in them that cost more and that is passed onto drivers—will stop people from buying cars?
The higher cost of microwaves will stop people from buying microwaves? And stop buying stoves? And refrigerators?
People will buy fewer smartphones? Businesses will buy fewer laptops and servers?
Depending on how bad the hike is, maybe? You're essentially arguing that consumers are unresponsive to price increases which just isn't true.
If the hike is bad enough we might see a return to kitchen electrics that don't use microcontrollers at all. Unironically good news if you want physical buttons again.
Someone lives in the US, which is addicted to sprawling, car-centric suburbs. Car prices go up. What are they going to do? Walk? Bike? Take public transit? (Which is one of the arguments for (so-called) 15 minutes cities: it gives people more freedom to choose their mode of transportation instead of forcing one particular mode.)
Are you not going to buy a refrigerator when yours break down and food starts going bad?
While they can stretch out the depreciation/lifespan schedule, are business going to stop buying laptops and servers? If their (capex) costs go up, are the businesses going to eat that cost or pass it on to their customers?
As much as I don't think Trump thinks things out longer than it takes to say.
You can't be using the trade association's comment at face-value. Tariffs have absolutely caused factories to be build elsewhere (see car manufacturing) although where a chip site appears in the US or Mexico/Canada (NAFTA) is very arguable.
China has a history of buying out its critics, and I do not doubt for a second that Donald Trump is for sale (notice how he changed his tune on TikTok?)
There's been many complaints about DEI requirements in the CHIPS Act. Given that DEI is a favorite right-wing talking point, amendment or repeal+replace might be likely, but I doubt it would be scrapped altogether.
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