Employees work on the production line of silicon wafers in a workshop of Jiejie Semiconductor Co., Ltd on March 17, 2021 in Nantong, Jiangsu Province, China.
Xu Congjun | Visual China Group | Getty Images
The Senate on Tuesday passed one of the largest industrial laws in US history to ensure the US remains competitive with China as one of the world’s technological powerhouses.
The bill provides funding for scientific research, subsidies for chip and robot manufacturers, and a revision of the National Science Foundation.
The scope of the bill, the end product of at least six Senate committees and nearly all members of the Chamber, reflects the myriad of fronts in the rivalry between the US and China.
It also likely marks one of the last major bipartisan initiatives of 2021, evidence that U.S. lawmakers generally endorse legislation that counteracts Beijing’s economic and military expansion.
If the country fails to expand semiconductor production or redirect rare earth supply chains, proponents say, the US could be at a strategic disadvantage in the years to come.
Most of the US Innovation and Competition Act is a proposal previously known as the “Endless Frontier,” written by Indiana Republicans, Schumer and Senator Todd Young.
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Endless Frontier would revise the National Science Foundation, allocate $ 81 billion to NSF between fiscal years 2022 and 2026, and create a directorate for technology and innovation.
The bill would also fund a grant program administered by the Department of Commerce that provides financial incentives offered by states and local governments to chipmakers who upgrade factories or build new ones.
The success of the Senate bill also comes from the fact that the White House is reinforcing its own recommendations on securing American supply chains that run through China and counteracting Beijing’s geopolitical ambitions.
The White House announced on Friday that it would expand restrictions on American investments in certain Chinese companies with alleged links to the country’s military and surveillance efforts, adding more companies to the growing US blacklist.
Then, on Tuesday, the White House said it would examine a dramatic expansion in US production of lithium batteries, rare earth minerals and semiconductors.
While the debate on multiple amendments prevented the Senate from passing the bill before the Memorial Day recess, the bipartisan passion for keeping the US competitive is expected to back its case in the House of Representatives.
The Chamber is expected to review the legislation in the coming weeks, albeit possibly at a slower pace as representatives draw up different sections.