What’s the Fate of the CHIPS Act?

President Trump's recent joint session to Congress stirred debate around the future of the CHIPS and Science Act, with his call for its repeal.

"The CHIPS Act is a horrible, horrible thing," President Trump declared during his speech. He argued that funds currently directed toward semiconductor subsidies could instead be "better spent reducing our enormous national debt or invested in areas of greater benefit to the American people."

Despite this clear statement from the president, repealing the CHIPS Act would not be straightforward. Several potential pathways exist:

Legislative Action: Congress would need to pass new legislation specifically repealing the CHIPS Act. This path requires substantial support in both chambers, which is even more difficult given that many Members currently in the House and Senate voted for this bill.

Budgetary Maneuvers: The administration could attempt to undermine or limit the CHIPS Act through creative budgeting, redirecting or rescinding appropriated funds. This could face backlash from states where CHIPS Act funding has been focused, such as Arizona and Ohio.

Executive Actions and Rulemaking: The White House could use executive authority to revise or rescind existing implementation guidelines, creating bureaucratic obstacles for companies seeking subsidies. While this approach could slow down the program, it wouldn't repeal it outright and might lead to legal challenges.

Despite these possible approaches, political reality presents substantial obstacles. Members of Congress, particularly those in states benefiting from substantial semiconductor industry investments, are likely to push back strongly against repeal efforts.

While President Trump’s declaration has sparked a serious dialogue about the future of the CHIPS Act, the actual repeal of this legislation faces considerable hurdles and is likely not a top priority for the White House at the moment.