Trump’s Trade War Puts the CHIPS Act in the Crosshairs

Trump’s Trade War Puts the CHIPS Act in the Crosshairs

President Donald Trump’s trade war and push to bring manufacturing back to the U.S. are now targeting one of his predecessor’s signature laws: the CHIPS and Science Act.

What is the CHIPS Act?

The CHIPS Act was a bipartisan law signed by Joe Biden in 2022. It allocated $52 billion to support the domestic semiconductor industry, aiming to reduce the U.S.'s reliance on Asian countries for critical electronic components.

Most of this funding goes toward manufacturing subsidies, which have already prompted over $400 billion in promised investments from major chipmakers like Samsung, Intel, and Taiwan’s TSMC.

Trump’s Take on the CHIPS Act

Trump has been vocal in calling the CHIPS Act a waste of taxpayer money. He believes that tariffs alone could encourage U.S. factory building, while also generating revenue. Instead of continuing with the CHIPS Act, Trump has urged Congress to repurpose the funds for other uses.

What’s the Likely Outcome?

While Trump’s stance puts the CHIPS Act at risk, the law enjoys broad bipartisan support on Capitol Hill, so repealing it would be challenging. Without a repeal, Trump’s administration will likely be required to spend the money that Congress has already allocated.

However, Trump’s team may try to remove labor or environmental regulations or even renegotiate contracts that were signed under the CHIPS Act.

For now, the administration is reviewing the details, and we’ll have to wait to see their strategy moving forward.

This sets up the situation clearly, laying out the background and contrasting Trump’s position with the broader political support for the CHIPS Act.