In a new episode of the trade war between the United States and China, the House of Representatives yesterday adopted a bill to relocate electronic chips, essential for the production of smartphones and automobiles, to the United States.
The text was approved, by 222 votes against 210, a few hours after the opening of the Winter Olympics in Beijing, a sign of Chinese influence and that the United States has boycotted at the diplomatic level.
The America Competes Act provides for an investment of 52 billion dollars to revitalize the US semiconductor industry, which is currently manufactured mainly in Asia. A similar text was already adopted in the Senate in June, voted on by congressmen from both parties. But the two bills will have to be harmonized and that will involve lengthy negotiations on Capitol Hill.
Computer chips are essential to a host of industries and products ranging from cars and smartphones to medical equipment and vacuum cleaners. And the pandemic has caused an alarming drop in semiconductor stocks.
National security. The government of Joe Biden assures that this shortage has a direct effect on galloping inflation in the United States and that it affects the popularity rating of the Democratic president among public opinion.
The House of Representatives bill also provides 45 billion dollars (39.2 billion euros) to strengthen the US supply chain. It responds to the “economic and national security imperative of supporting American industry and workers,” House Speaker Nancy Pelosi said yesterday. It allows the United States “not to be at the mercy of other countries,” he said at a press conference.
But almost unanimously, House Republicans opposed the bill, saying it does not do enough to hold China accountable for its human rights violations and foresees too much investment in climate change.
China, at economic war with the United States since the era of former President Donald Trump, is one of the few issues on which the Democratic president agrees with his Republican predecessor. Beijing, for its part, accuses Washington of exaggerating the so-called Chinese threat.
Made in the USA The Biden administration is urging Congress to quickly adopt a final text, with the approval of both chambers, in hopes of being able to present these investments during its general policy speech, scheduled for March 1.
Biden stressed, in January, the enormous economic potential of these chips. He gave the example of cars, of which, currently, 4% of its components are semiconductors. In 2030, these will represent 20% of car manufacturing.
Biden wants manufacturers to relocate production to the United States and advocates “made in America.” Chip giant Intel has already announced the construction of two semiconductor factories in Ohio, a former stronghold of steel production.
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