Congress mulls taking on China on chips; GOP wary of price tag

Schumer’s package has $50B for semiconductor manufacturing, research.

Republicans in Congress say they’re willing to work with Senate Majority Leader Chuck Schumer to counter China’s economic clout and address a global shortage of semiconductors, but the price tag of a Democratic-led proposal may drive away GOP support.

Schumer and Republicans have been discussing proposals to fund semiconductor research and development, as well as science and technology to compete with the government subsidies that Beijing offers its companies. Yet Republicans have been wary that the final proposal could end up costing a lot more than anticipated.

President Joe Biden included the China-related proposals in a sweeping $2.25 trillion infrastructure plan he unveiled in Pittsburgh on Wednesday, even though the bigger package has been broadly rejected by Republicans. Biden’s announcement could complicate efforts to build Republican support because it feeds into concerns that the bill will be a Democratic domestic wish list disguised as competition with China, one congressional aide said.

Schumer still plans to wrap several China-related bills into one standalone package that would go through a bipartisan committee debate and amendment process starting later this month, an aide to the New York Democrat said. This includes a $50 billion investment in semiconductor manufacturing and research, as well as $50 billion for the National Science Foundation to create a technology directorate.

If the congressional debate gets bogged down in committee, however, Democrats may decide to add the bill into the broader infrastructure bill.

Sen. Todd Young, R-ind., and others in his party have made clear to Schumer that adding more spending or additional proposals to the China bill is a potential obstacle to Republican support, and Schumer has acknowledged the challenge, people familiar with the discussions said. The overall price tag currently stands at $100 billion, spent over five years.

GENERAL MOTORS General Motors is idling Wentzville Assembly in Missouri from March 29 through April 5 due to an ongoing global shortage of semiconductor chips used in various car parts.