Trump win signals coming turnaround in chip policy US
Now that Donald Trump has won the US presidential election, Republicans have starting focusing on the technology and chip industry. Mike Johnson, Speaker of the U.S. House of Representatives, downplayed Trump’s earlier comments about possibly repealing the CHIPS Act, a key law that boosts the US chip sector. This law, which has created an investment boost of over $400 billion, has been under fire for some time by Republicans who question its effectiveness and geopolitical impact.
The CHIPS Act was introduced in 2022 to bring chip production back to the United States and limit China’s growing influence in the semiconductor sector. The chip industry is crucial to the economic and national security of the United States.
Trump has been emphatic about his views on the US chip industry during the election period. He criticised the CHIPS Act and expressed concerns about Taiwan’s influence, particularly through companies like TSMC, on the US chip market. Trump argued that Taiwan is too dominant in technology that affects national security. In his view, the US should exert more pressure to increase domestic manufacturing capacity. There is now speculation about a possible revision of the CHIPS Act, perhaps a “CHIPS Act 2.0,” aimed at further strengthening US independence in this sector.
Trump already threatened a 10-20% universal import tariff on goods from abroad during the election period. That would be on top of 60% for all imports from China. It would raise the average (weighted) US tariff from 2.3% in 2023 to 17%, business bank Evercore calculated.
Reacting to new Dutch export rules for ASML chip machines announced Friday, China’s Ministry of Commerce said the country is “dissatisfied”.
Europe also developed a European Chips Act to increase technological independence, particularly because of geopolitical tensions. If the US introduces stricter measures to discourage foreign companies from entering the US market, it could force European chip companies operating in the US to adjust or even relocate their production.
The EU chip sector could be significantly affected by policy changes in the US. The uncertainty surrounding the possible introduction of tariffs or export restrictions could affect trade and collaborations. This would affect not only the economy, but also the position of the EU as an important player in the global semiconductor industry.
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