‘Your CHIPS Act is Horrible’: Trump Calls to End $52Bn Semiconductor Subsidy

US President Donald Trump called for an end to the 2022 bipartisan law that provides $52.7bn in subsidies for semiconductor CHIPS manufacturing and production and uses the proceeds to pay debt. 

During the primetime address to Congress, Trump said, “Your CHIPS Act is a horrible, horrible thing. We give hundreds of billions of dollars and it doesn't mean a thing. They take our money and they don't spend it.” He further asked the Speaker to “get rid” of the Act and use “whatever is left over” to “reduce debt or any other reason you want to.

Trump’s statement was reciprocated by a huge applause from the House. US Vice President JD Vance, also stood up to show his support for the revocation of this Act. Vance’s home state of Ohio had won a huge Intel project due to the same law.

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CHIPS Act

The CHIPS and Science law, signed in August 2022 by then-US President Joe Biden, included $39bn in subsidies for US semiconductor manufacturing and related components and $75bn in government lending authority.

Under Biden, the Commerce Department convinced all five leading-edge global semiconductor firms to locate factories in the US to tackle national security risks from imported CHIPS.

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The CHIPS Act is one of the most serious US attacks on industrial policy in over a generation.  The Act allocated $39bn in grants, loans, and 25% tax incentives to revive US semiconductor production, as well as $11bn for chip research and development. The goal is to lessen reliance on Asia for small electronic components used in anything from microwaves to missiles.

Democrats and Republicans have argued that the CHIPS Act is critical to US national and economic security, and Trump may struggle to obtain enough votes to dismantle it.  Dozens of Republican politicians supported the proposal, and several red districts have gained factories or other projects funded by the program.