United States

House Debuts Long-Awaited Response to Senate's China Competition, Semiconductor Bill

Rod Lamkey | Reuters
  • The House of Representatives on Tuesday debuted a bill designed to boost U.S. semiconductor manufacturing and competition with China.
  • The House bill is the long-awaited response to the $250 billion bill the Senate passed in June known as the U.S. Innovation and Competition Act.
  • The House bill cuts out about $200 billion that the Senate included to reinforce U.S. scientific research and technological innovation.

The House of Representatives on Tuesday debuted a bill designed to boost U.S. semiconductor manufacturing and competition with China, including $52 billion to support domestic chip research and production.

The House bill, called the America Competes Act, is the long-awaited response to the $250 billion bill the Senate passed in June known as the U.S. Innovation and Competition Act.

While the House version matches the Senate's sum to spur the domestic production of semiconductors, it cuts out about $200 billion that the Senate included to reinforce U.S. scientific research and technological innovation.

"Today, the House takes action to transport our nation into the future, with the America COMPETES Act: bold, results-oriented legislation that will strengthen America's national and economic security and the financial security of families, and advance our leadership in the world," House Speaker Nancy Pelosi, D-Calif., said of the bill. "The House legislation will supercharge our investment in CHIPS, advance manufacturing at home, strengthen our supply chain, transform our research capacity and advance our competitiveness and leadership abroad."

Passage of the House bill is expected before March 1.

The House version includes $45 billion to support supply chain resilience and improve the nation's economy "by preventing shortages of critical goods." That provision would subsidize the domestic production of critical goods and industrial machinery to ensure the U.S. could maintain smooth supply-chain operations if global trading routes were disrupted.

Senate Majority Leader Chuck Schumer, a chief author of the Senate's version of the bill, applauded the arrival of the House legislation but alluded to future discussions to resolve differences between the two bills.

"The introduction of the vital America COMPETES Act of 2022 in the House is an important step forward to setting up a conference with the Senate-passed U.S. Innovation and Competition Act, so we can quickly negotiate a final bill for the president to sign into law," Schumer, D-N.Y., said a press release Tuesday evening.

President Joe Biden has made the development and protection of critical U.S. supply chains a top priority since taking office. Many American industries have faced supply headaches over the past two years thanks to the Covid-19 pandemic that disrupted global production and shipping routes in Asia.

Several sectors — but especially the auto industry — have reported chronic semiconductors shortages that have crippled the production of final products like phones and cars. Meanwhile, transportation and hospitality businesses say the virus and its variants have discouraged workers from returning to work, leading to ongoing labor shortages despite record job growth in 2021.

Many lawmakers and administration staff say the legislation is also an effort to reduce the nation's reliance on Beijing for critical goods and rare earths. Biden said the U.S. and China "need not have a conflict, but there is going to be extreme competition."

The president on Tuesday said that the Senate and House bills represent "the sort of transformational investments in our industrial base and research and development that helped power the United States to lead the global economy in the 20th century and expand opportunity for middle class families."

"Together, we have an opportunity to show China and the rest of the world that the 21st century will be the American century – forged by the ingenuity and hard work of our innovators, workers, and businesses," he added.

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