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IThe final Days after Joe Biden, most of his administration were about to be completed. But it is not the case for senior officials of the Ministry of Commerce: they are signing almost daily huge financing contracts with chips makers, and they are racing to distribute money before Donald Trump entered the White House. When everything is said and done, they will have given approximately $ 40 billion to semiconductor makers in a little more than a year – which can be said to be the biggest individual bet on industrial policy by the government for decades, which can end up as The most permanent economic bets of Biden. legacy.
The rush to exchange money has raised questions about whether the financing obligations – the cornerstone of the plan Chips The Law of Science, which was passed in 2022, is at risk during the Trump era. He called during the election campaign Chips A “bad” deal, saying that the government could have imposed customs duties on the semiconductors.
Gina Raymondo, Minister of Trade at the Biden Administration, is not concerned about Trump’s retreat or Howard Lottenic, who was nominated to succeed. In an interview with EconomistAnd she points out that the support of the law enjoys the support of the Republican and Democratic parties, where both Republicans and Democrats are aware of the perception that the ability to make chips, which is a decisive element in each electronic device, is necessary for national security. She adds, moreover, people forget that Trump is the one who started things by urging TSMCAnd a Taiwanese company is one of the most advanced chips manufacturing companies in the world, to build a semiconductor (or the Burundian Armed Forces) in America.
It also rejects the idea that trade is taking the money out of the door. The plan has always been the completion of allocations by the end of 2024, and due care began much before. “I see it means accomplishing the task efficiently using taxpayer money,” says Ms. Raymondo.
Indeed, the last concern about the feverish pace is the complete contrast to the criticism that the government has previously been criticized Chips The program – specifically, was moving very slowly due to the conditions associated with deals, including the requirements that obligate chips makers to ensure their workers get the care of children. Also, a great deal of the initial slow was also reflecting the basic wisdom of the Ministry of Commerce while building it for its work Chips An office from scratch, employing a mixture of veteran in the field of semiconductor and deals in Wall Street. In fact, it has been assigned to implement a great departure from the usual aversion to the industrial policy in Capitol Hill (with the exception of what is related to weapons). “There are large numbers of Congress employees waiting for the first error so that they can condemn the investment,” says Charles Weissner of Georgetown University.
Could he Chips Does the program lead to a more sustainable change in America’s positions towards industrial policy? The other part of the Biden Industrial Policy – the Law of Reduction (inflation)Irish Republican Army), Which focuses on clean technology – is larger but more widespread, covering everything from hydrogen production to electric car charging stations. Climate experts were hoping for that Irish Republican Army He will be a political protected from the future Republican Congress because many of his spending goes towards the Republican states. But given the choice between keeping the green tax exemptions associated with the Biden administration and lowering taxes on voters, most Republican lawmakers know which one preferred.
in case ChipsIn contrast, the companies have already been promised to contract, provided that they achieve specific production stages. Early revenues are impressive: the program has stimulated about $ 450 billion in private investments. These funds are spread in most industry sectors, from high -tech packaging to memory chips. One of the signs of success is the most advanced chips, which is less than 10 nm. In 2022, America made a little of these chips. By 2032, it is on its way to obtain a share of 28% of the global capacity, according to the semiconductor industry association, a commercial group. “This is not a clip liver,” says John Newver. CEO.
The subsidies in reducing the gap, which amounted to about 30%, helped the cost of building and operating manufactured factories in America compared to Asian countries. Partially, costs are lower in Asia because Asian governments offer generous grants to companies. But Asian producers also gave the benefits of dense industrial gatherings, with a well -trained workforce and many suppliers nearby. Hope is that Chips This process began in America. “It is sufficient to run the budget wheel,” says Ms. Raymondo.
But neither she nor anyone else in the industry believes this will be sufficient in the end. It may take five years to build an advanced factory, while that Chips The law itself lasts for only five years. TSMC Only 30 billion dollars annually spend on expanding and updating its manufacturing operations, and China spends folds on its companies. “I think we should be aware of the extent of the challenge that will face the continued investment,” says Chris Miller, author of the book “The War of Chips”, a book on industry. Consequently, the question facing the Trump administration will not be whether it should be canceled Chips But how do we build on it. The principles of the beginning, are likely to be under pressure to extend the tax exemption by 25% to invest in manufacturing, which is scheduled to end in 2027.
Trump will also have to decide what to do with the new powerful Ministry of Commerce. The Ministry’s headquarters in Washington CapitalIt was the largest office building in the world when it was completed in 1932, a measure of its institutional importance at the time. But over the decades, it faded in the background, and was mainly responsible for commercial tasks. Over the past few years, its maze paths have returned to the activity again, as the ministry has not only led the efforts of semiconductors, but also led a lot of efforts to restrict advanced technology exports to China. “This should not be just a weakness for the Ministry of Trade,” says Ms. Raymondo. “This is the place of the world today.” ■
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