WASHINGTON — In his address to a joint session of Congress on Tuesday, President Donald Trump called for the repeal of the CHIPS Act, a Biden-era law that has awarded billions in federal subsidies to U.S.-based semiconductor-manufacturing facilities, including one in Michigan.
"Your CHIPS Act is a horrible, horrible thing," Trump said during his speech. "We give hundreds of billions of dollars and it doesn't mean a thing."
Per a January report from the Semiconductor Industry Association, the Biden administration awarded a total of $32 billion in grants from the $52 billion package.
"This bill makes it clear: The world’s leading innovation will happen in America," Biden said about the act after its passage.
In Michigan, a semiconductor facility in Hemlock has received $325 million from the law. A planned 1,000-plus-acre mega site near Flint has also applied for a piece of the federally funded pie. Its approval is still pending.
In addition to his comments on the CHIPS Act, Trump also touted his newly imposed tariffs on Canada, China and Mexico during his speech.
"Tariffs are about making America rich again and making America great again," the president said.
In a rebuttal speech, Sen. Elissa Slotkin, who won Michigan's open Senate seat last fall despite Trump's flipping of the state, offered the Democrats' opposition.
"His tariffs on allies like Canada will raise prices on energy, lumber and cars," she said. "Do [his] plans actually help America get ahead? Not even close."
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Slotkin makes case against Trump agenda in Democratic response
Paul Isely, a professor of economics at Grand Valley State University, says the CHIPS Act and Trump's tariffs share the same goal of strengthening domestic manufacturing but take different political approaches.
While the CHIPS Act is paid for by taxpayer dollars, the cost burden of the tariffs will be bore by U.S. importers and passed along to consumers before, ideally, domestic supply chains are able to better compete with their foreign counterparts by manufacturing their products at lower costs.
"What's interesting about the choices [Trump] has made so far is that they're front-loaded on pain," Isely said. "The negative effects are front-loaded; the positives are back-loaded."
"The question is, Is the U.S. economy strong enough to bear those front-end costs without having that multiply into something like a recession?" Isely said.
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