Donald Trump has consistently expressed his \u00a0discontent\u00a0 with the \u00a0Chips Law\u00a0, a significant piece of legislation approved by Joe Biden’s administration in July 2022. Just weeks ago, Trump made headlines with his announcement regarding \u00a0tariffs\u00a0 on foreign production of computer chips, semiconductors, and pharmaceutical products. He stated, \u201cIn the very close future, we will impose tariffs on foreign production of computer chips, semiconductors, and pharmaceutical products to return the manufacture of these essential goods to the US […] They went to Taiwan; now we want them to return. We do not want to give them billions of dollars in the \u00a0ridiculous Biden program\u00a0. They already have billions of dollars.\u201d<\/p>\n
<\/p>\n
Trump’s term ”\u00a0the ridiculous Biden program\u00a0” signifies his staunch opposition to the Chips Law. His criticism intensified during a podcast with Joe Rogan in October, where he passionately remarked, \u201cWe put millions of dollars on the table so that rich companies came, they took the money and built chip companies here. And anyway, they will not give us the best companies.\u201d At that point, discussions around Trump’s potential dismantling of the Chips program began circulating, prompting semiconductor manufacturers to hasten their efforts in collecting subsidies before his anticipated return to office.<\/p>\n
<\/p>\n
Leading semiconductor companies like \u00a0Intel\u00a0, \u00a0TSMC\u00a0, and \u00a0Globalfoundries\u00a0 have reportedly already received a portion of the subsidies designated under the Chips program during Biden\u2019s tenure. Although the funds disbursed appear to be secure, a significant amount remains under the purview of the Department of Commerce, currently headed by \u00a0Howard Lutnick\u00a0. According to Reuters<\/a>, the administration is contemplating the \u00a0reallocation\u00a0 of at least $2 billion from this fund.<\/p>\n <\/p>\n China is restricting exports of many of these minerals in response to US sanctions and their allies.<\/p>\n<\/p><\/div>\n<\/div>\n If this proposal succeeds, funds initially allocated for semiconductor research and chip manufacturing could be redirected to projects focused on extracting and processing \u00a0critical minerals\u00a0. As it stands, \u00a0China\u00a0 controls a substantial portion of the extraction, processing, and distribution of these vital resources necessary for various industries, including integrated circuits, telecommunications, and electric vehicles. Recently, the Chinese government has been restricting the export of many of these minerals in reaction to US sanctions and similar actions taken by its allies.<\/p>\n <\/p>\n This scenario accentuates the urgency for the US to significantly decrease its reliance on critical minerals predominantly controlled by China. Trump’s recent decisions clearly indicate his prevailing concern regarding the strengthening of the \u00a0American rare earth industry\u00a0, as opposed to merely offering subsidies to chip manufacturers. However, should this \u00a0$2 billion reallocation\u00a0 occur, it would also lead to Howard Lutnick gaining wider influence in the critical mineral sector\u2014a prospect encouraged by Trump’s apparent trust in him.<\/p>\n <\/p>\n Image | TSMC<\/a> | Gage Skidmore<\/a><\/p>\n