The US Congress is moving with increasing urgency on bipartisan legislation to confront China, and bolster US competitiveness in technology and critical manufacturing with the US Senate poised to act within weeks on a package of bills.
As part of the package, US Senator John Cornyn plans to push for incentives to strengthen domestic semiconductor manufacturing through his CHIPS for America Act, a person familiar with the matter said.
The bill became law earlier this year, but was never funded.
Photo: Bloomberg
US President Joe Biden has called for as much as US $50 billion for the initiative.
Cornyn and other lawmakers want what Congress has already passed to be fully funded.
The US Senate Foreign Relations Committee, on a 21-1 vote Wednesday, approved a bill aimed at China on a number of fronts, including by more closely scrutinizing foreign donations to US colleges and universities.
The panel’s action came shortly after US Senate Majority Leader Chuck Schumer and US Senator Todd Young formally introduced their “endless frontier act” that, among other things, would authorize US$100 billion over five years to bolster research and development in technology, computing, artificial intelligence, manufacturing and other areas.
“It’s a big, bold, bipartisan initiative” to propel the US “into the 21st century,” Schumer said on the Senate floor.
The US Senate Commerce Committee is expected to put together the legislation next week, and Schumer has said he expects to combine it with other bills dealing with China and US competitiveness on the Senate floor as soon as next month.
The developments are an indicator of the broad, bipartisan sentiment in Congress to counter China’s growing economic and strategic power and to make a statement about the country’s treatment of Uighurs and pro-democracy activists in Hong Kong.
The “strategic competition act” approved by the Senate committee on Wednesday included an amendment to prohibit the US from sending a government delegation to the Winter Olympics in Beijing in February next year. US athletes would still be allowed to compete.
Other concerns are also influencing lawmakers. A global shortage of semiconductors has already caused economic pain in the US, as auto plants have been forced to shut down because of a lack of chips for cars and trucks. Other industries are also affected, and the shortage has led to added new urgency to efforts to increase chip manufacturing in the US.
US Secretary of Commerce Gina Raimondo on Tuesday told senators that production deficiencies amounted to “a national security risk and an economic security risk.”
US Representative Michael McCaul said he and other sponsors of the CHIPS act “look at endless frontier as our response to counter the Chinese Communist Party when it comes to technology, whether it’s artificial intelligence, quantum computing, 5G versus Huawei.”
“And the chip manufacturing falls right in place with that because it’s such a big part of our military apparatus,” McCaul said in an interview.
Young said last week that some of his colleagues were asking to slow down the legislation so that they could review it and that it could be weeks before it would be introduced. Then things sped up significantly.
“Right now, the Chinese Communist Party is emphasizing to the world that the United States is a divided nation,” Young said in a statement. “This is a rare opportunity to show the authoritarians in Beijing, and the rest of the world, that when it comes to our national security, and most importantly our China policy, we are united.”
The US dollar was trading at NT$29.7 at 10am today on the Taipei Foreign Exchange, as the New Taiwan dollar gained NT$1.364 from the previous close last week. The NT dollar continued to rise today, after surging 3.07 percent on Friday. After opening at NT$30.91, the NT dollar gained more than NT$1 in just 15 minutes, briefly passing the NT$30 mark. Before the US Department of the Treasury's semi-annual currency report came out, expectations that the NT dollar would keep rising were already building. The NT dollar on Friday closed at NT$31.064, up by NT$0.953 — a 3.07 percent single-day gain. Today,
‘SHORT TERM’: The local currency would likely remain strong in the near term, driven by anticipated US trade pressure, capital inflows and expectations of a US Fed rate cut The US dollar is expected to fall below NT$30 in the near term, as traders anticipate increased pressure from Washington for Taiwan to allow the New Taiwan dollar to appreciate, Cathay United Bank (國泰世華銀行) chief economist Lin Chi-chao (林啟超) said. Following a sharp drop in the greenback against the NT dollar on Friday, Lin told the Central News Agency that the local currency is likely to remain strong in the short term, driven in part by market psychology surrounding anticipated US policy pressure. On Friday, the US dollar fell NT$0.953, or 3.07 percent, closing at NT$31.064 — its lowest level since Jan.
The Financial Supervisory Commission (FSC) yesterday met with some of the nation’s largest insurance companies as a skyrocketing New Taiwan dollar piles pressure on their hundreds of billions of dollars in US bond investments. The commission has asked some life insurance firms, among the biggest Asian holders of US debt, to discuss how the rapidly strengthening NT dollar has impacted their operations, people familiar with the matter said. The meeting took place as the NT dollar jumped as much as 5 percent yesterday, its biggest intraday gain in more than three decades. The local currency surged as exporters rushed to
PRESSURE EXPECTED: The appreciation of the NT dollar reflected expectations that Washington would press Taiwan to boost its currency against the US dollar, dealers said Taiwan’s export-oriented semiconductor and auto part manufacturers are expecting their margins to be affected by large foreign exchange losses as the New Taiwan dollar continued to appreciate sharply against the US dollar yesterday. Among major semiconductor manufacturers, ASE Technology Holding Co (日月光), the world’s largest integrated circuit (IC) packaging and testing services provider, said that whenever the NT dollar rises NT$1 against the greenback, its gross margin is cut by about 1.5 percent. The NT dollar traded as strong as NT$29.59 per US dollar before trimming gains to close NT$0.919, or 2.96 percent, higher at NT$30.145 yesterday in Taipei trading
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