WASHINGTON — As U.S. markets shudder in response to President Donald Trump’s tariff-heavy economic agenda and the president himself openly speculates about a recession, a pitch he made during last week’s joint congressional address — urging Congress to repeal the CHIPS and Science Act — is being rebuked by senior members of his own party for fear it would hamper U.S. efforts to compete with China’s semiconductor industry and risk tens of thousands of American jobs.
The CHIPS Act, passed in 2022 with bipartisan margins to provide tens of billions of dollars in federal funding, loans and tax credits for domestic semiconductor manufacturers, has helped spur roughly half a trillion dollars in planned tech investments across the country, according to some estimates.
The internal Republican pushback, a rarity since Trump returned to Washington in January, comes as Trump’s own trade representative is holding a hearing Tuesday on China’s efforts to dominate the strategically and economically vital semiconductor industry. Last week, in the days after Trump’s speech, senior Chinese officials announced a roughly $140 billion fund for their domestic tech industries, as they seek to circumvent Trump’s tariffs and other U.S. restrictions on their supply chains and trade opportunities.
“Your CHIPS Act is a horrible, horrible thing,” Trump said during his address, as he boasted of a promised $100 billion investment by Taiwan Semiconductor Manufacturing Co. in U.S. production facilities. “You should get rid of the CHIP Act and whatever’s left over, Mr. Speaker, you should use it to reduce debt or any other reason you want to.”
Trump bragged that TSMC, a major player in the global semiconductor industry whose market share the president falsely inflated to “97%” in his remarks, didn’t need to be incentivized by U.S. federal dollars to build its facilities in the states and made the decision to avoid threatened tariffs. But TSMC had already announced a $65 billion investment in Arizona facilities last year, in part backed by $6.6 billion in direct funding and another $5 billion in U.S. government loans through the CHIPS Act.
The president continued to discuss his desire to repeal one of his predecessor’s signature achievements publicly throughout the week, saying Friday that the program is “a tremendous waste of money” and claiming the funds — handed out to some of the world’s largest tech companies — were hard to qualify for “because they go by race, they go by gender, they go by all sorts of things.”
On Monday, The New York Times reported that chip company executives are consulting their legal teams on how to avoid the CHIPS Act funding from being cut off by a Trump administration that has pursued the president’s goals swiftly and without concern for Congress’ constitutional role of controlling the federal government’s purse strings. The Times also reported that the Commerce Department laid off 40 workers assigned to the CHIPS program last week, firings previously reported by Reuters.
The Commerce Department did not immediately respond to a request for comment. Trump is set to meet with the CEOs of Qualcomm, Dell, IBM, HP, Intel and Oracle on Monday afternoon, according to the White House.
While House Speaker Mike Johnson, R-La., applauded Trump’s repeal pitch and had also floated repealing the CHIPS Act last fall — walking it back in the days before the election — he told reporters Wednesday he will wait for Trump’s lead before pursuing any changes to the law even if there is “work we need to do.” Senate Majority Leader John Thune, R-S.D., said, “I’m not sure exactly what he was getting at there,” according to NBC News, but expressed openness to tweaking the law.
But Sen. Todd Young, R-Ind., told reporters he was given assurances by Trump’s Cabinet nominees that the law was safe and that he had reached out to the White House after Trump’s speech to get “clarity.”
“It’s been one of the greatest successes of our time — diplomatic successes, commercial successes and economic successes — and we’ve seen by some estimates roughly $650 billion of private-sector commitments from a roughly $30 billion taxpayer investment,” he said.
Young and 16 other Republican senators joined Senate Democrats’ then-majority to vote for the law in 2022. Among those Republicans, Texas Sen. John Cornyn said last week he didn’t think the repeal would happen and North Carolina Sen. Thom Tillis said “that’s not going to happen” at all.
“It was a statement at a joint address, but do you really believe we have eight or 10 votes from the Democrat side to repeal it, even if on its face we thought it was a good idea?” Tillis said, according to The Hill.
A Republican county executive in upstate New York told Spectrum News last week that a Micron plant being constructed outside Syracuse with funds from the CHIPS Act would go ahead as planned and that senior Trump administration officials, including Environmental Protection Agency Administrator Lee Zeldin, had worked with him as recently as the day before the speech to keep the more than $100 billion project on track.
“I didn’t give [TSMC] 10 cents. They came here because of tariffs, because they didn’t want to pay the tariffs,” Trump said in the Oval Office on Friday as he criticized the CHIPS Act. “And they also came here because they like the results of the election, because they know that I’m very pro-business and pro-jobs.”
