By Alexandra Alper
WASHINGTON (Reuters) – Chipmakers are divided over how aggressively they can oppose a legislative proposal that would give the United States new powers to block billions of U. S. investments in China, according to documents published through Reuters.
The move comes from the House’s edition of a bill that would also give chipmakers a $52 bill to expand their operations, a boon to the industry that has made some corporations reluctant to vigorously oppose investment controls in China.
But the “foreign investment” proposal may hamper those companies’ investment abroad, leading some chipmakers to aggressively defend their inclusion in the chip bill drafted by Senate and House lawmakers.
“It would be hypocritical for corporations to ask for money and yet refuse to allow the government to have a say in building new factories in China,” said an executive at a chip production company.
Another industry leader disagreed, noting that chipmakers can simply invest and oppose the restriction. “We can walk and chew gum at the same time,” he said.
The investment puts the industry in the awkward position of aggressively seeking subsidies, but faces headwinds from its foreign direct investment in Chinese factories and money from Chinese startups if the bill is approved with the questionable move.
On a occasion at the White House in January to announce plans to build a $20 billion chip factory in Ohio, Intel Corp CEO Pat Gelsinger said that without government funding, “we’re still going to start the Ohio site. It’s just not going to take place that fast and it’s not going to grow that fast.
The company is also looking to expand production at a plant in Chengdu, China, but Biden’s management rejected the plan, Bloomberg reported in November. Intel declined to comment.
The outbound investment measure was first proposed as an independent bill through Republican Senators John Cornyn and Senator Bob Casey, but was later added to the House edition of a large bill that includes subsidies to chipmakers and aims to counter China’s rise to power. A third source noted that it was vital not to disappoint Cornyn, a staunch supporter of chip financing.
Reuters won an email from the Semiconductor Industry Association (SIA), which has said nothing about the provision, to its members last week seeking comment on a policy that described the measure as “too broad” and called for a separate legislative procedure for it.
“SIA encourages the progression of policies that do not unnecessarily impede callous and valid investments and similar business activities,” the organization wrote in the third edition of the draft principles, dated April 22 and mitigated from a previous edition.
“Before moving forward on overseas investment policies, the SIA encourages Congress to initiate a procedure consisting of formal hearings, stakeholder engagement, and committee matrix. “
SIA declined to comment.
The idea that the measure is supported by the Biden administration. President Joe Biden’s national security adviser, Jake Sullivan, said in July that the administration was evaluating new investments and contemplating investments abroad as it sought to better position the U. S. U. S. for generation competition.
However, Politico reported that the Treasury Department is running to weaken congressional momentum in favor of the measure, prompting lawmakers to pass a modest research pilot program instead of new regulatory powers.
Business groups, in addition to the Chamber of Commerce, have already expressed strong opposition to the legislative proposal, which would require the U. S. Trade Representative to vote for the U. S. Trade Representative and the U. S. Department of Commerce. The U. S. Department of Homeland Security forms a committee to compare transactions and present to the president those that pose a threat to national security and be obstructed.
A Rhodium study indicated that 43 percent of U. S. foreign direct investment transactions were in the U. S. U. S. jobs in China over the past two decades could have been leaked into the broad categories explained in the proposal.
The National Foreign Trade Council, whose members are Amazon, Facebook, Exxon and Chevron, also distributed a draft letter to other D. C lobby groups. expressing “strong opposition” to the measure and describing the creation of a new regulator as “unjustified”.
“The creation of a new interagency procedure will exacerbate regulatory inefficiency and invite protectionism to the banner of national security,” read the letter, received via Reuters and addressed to space and Senate leaders from both parties.
He declined to comment.
(Reporting by Alexandra Alper; additional reporting via Karen Freifeld; editing via Chris Sanders and Richard Chang)
. . .
© 2008-2022 – Shore News Media