The president is in favor of replacing subsidies with high tariffs to ensure foreign companies manufacture in the US.
President Donald Trump is calling for the end of a $52.7 billion semiconductor subsidy program aimed at encouraging companies such as Intel, TSMC and Samsung to expand US manufacturing.
“Your chip act is scary and scary. We’re giving hundreds of millions of dollars, but that doesn’t mean things. They take our money and don’t use it,” Trump said in a speech to Congress on March 4th.
The president then urged House Speaker Mike Johnson (R-La.) to redirect any unprecedented funds to repeal the law and reduce national debt or other priorities.
Trump’s recent comments are his strongest criticism of the Biden-era initiative, which aims to bring high-end chip manufacturing to the United States through taxpayer-funded grants. Instead of subsidies, Trump argued that the country should have used tariffs to put pressure on foreign companies to manufacture domestically produced products.
“What was important to them was that they didn’t want to pay the tariffs, so they came and built, and a lot of other businesses are coming,” he told lawmakers.
On March 3, TSMC announced plans to invest $100 billion in US manufacturing, including two additional facilities in Arizona. The commitment is well beyond the $65 billion that Taiwanese company has pledged three Arizona manufacturing plants for chips law grants and loans.
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Without TSMC’s voluntary investment, the tariffs on the chips created by Taiwan could have reached 50% penalty, according to Trump.
The Chips Act, passed in 2022, allocates $39 billion in grants to stimulate domestic semiconductor production after decades of offshoring to Asia.
In the final weeks of the Biden administration, the Commerce Department finalized the $33 billion Chips Act award. This includes Intel’s $7.86 billion, TSMC’s $6.6 billion, Micron’s $6.1 billion, and Samsung’s $4.7 billion.
Trump dismissed them as a bad deal.
“When we see us paying a lot of money to tip people, that’s not the way,” Trump said in November 2024 in an interview about the Joe Rogan Experience podcast. “We didn’t have to post 10 cents, we could do that with a series of tariffs.
“In other words, you’ll do it very high tariffs and they’ll come and build a tip company without doing anything,” he said.
Johnson, who voted against the Chips Act, first suggested that Republicans would “probably” try to abolish it following Trump’s comments on Joe Rogan’s podcast. He soon made it clear that GOP lawmakers would “reduce and improve key objectives further” and remove requirements related to the Biden administration’s Green New Deal.
Johnson did not respond to Epoch Times’ requests for comment at the time of publication.
Commerce Secretary Howard Lutnick said at a Senate confirmation hearing that he supports the Chips Act’s goal of developing the domestic semiconductor industry, but hopes the law will be carefully reviewed.
“I can’t say I respect what I haven’t read,” Rutnick said after being asked if he would honor the finalized funding agreement the Commerce Department signed with chipmakers.
“As long as the money is paid, I promise to strictly enforce documents signed by those companies to ensure that we make profits from the bargain. If they agree to do things, I will enforce them strictly.”
