GOP Leaders Reject Call to Repeal CHIPS Act

Republican congressional leaders are distancing themselves from President Donald Trump’s puzzling criticism of the CHIPS and Science Act, after he amplified his administration’s misleading claims about semiconductor investments being driven by tariff policy during Tuesday’s joint session of Congress.

The controversy began Monday when Secretary of Commerce Howard Lutnick attempted to credit Trump’s tariff policies, rather than the CHIPS Act, for Taiwan Semiconductor Manufacturing Company Limited planned investment of $100 billion in Arizona. “They’re coming here in huge size because they want to avoid the tariffs,” Lutnick claimed, despite TSMC’s previous $6 billion CHIPS Act grant having secured a $65 billion investment commitment from the company. For their part, TSMC’s CEO credited “customer demand.”

Trump doubled down on tariffs the next day, calling for the Act’s repeal immediately after touting TSMC’s investment plans. “Your CHIPS Act is a horrible, horrible thing,” Trump declared. “We give hundreds of billions of dollars, and it doesn’t mean a thing … All that was important to them was they didn’t want to pay the tariffs.” Importantly, if the CHIPS Act remains unrepealed, TSMC’s $100 billion commitment would be eligible for CHIPS Act support —
and accountability.

Industry experts quickly challenged President Trump’s characterization. Stan Kolbe, Executive Director of Government and Political Affairs at the Sheet Metal and Air Conditioning Contractors’ National Association (SMACNA), pointed out that unlike CHIPS Act projects, which have binding contracts, enforcement mechanisms, and clawback provisions for incomplete work: “The TSMC announcements are for future facilities with no signed contracts for site work, contractors, or permits,” Kolbe noted. Many CHIPS Act megaprojects, including TSMC’s in Chandler, Arizona, near Intel’s facilities, are already underway with union workers working under private sector project labor agreements, or PLAs.

Kolbe referenced the cautionary tale of Foxconn’s failed Wisconsin investment during Trump’s first term, where promised jobs never materialized. He said the disconnect between Trump’s criticism and economic reality runs deep. The CHIPS Act’s 25% investment tax credit and $39 billion in grants were specifically designed to offset the 30% higher cost of producing these chips domestically. The CHIPS and Science Act has also catalyzed construction of advanced research facilities at universities and science laboratories nationwide, requiring similarly specialized contractor expertise. 

Semiconductor manufacturers depend on globally sourced materials and specialized inputs to produce chips — materials that would still face tariffs under Trump’s plan, ultimately hurting domestic production. Furthermore, retaliatory tariffs from other nations would likely damage U.S. semiconductor exports, potentially pushing manufacturing further offshore rather than bringing it home. With Taiwan currently supplying 44% of U.S. logic chip imports, relying on tariffs to increase domestic production could destabilize the entire U.S. technology sector while failing to achieve the intended goal.

“I’m not sure exactly what he was getting at there,” said Senate Majority Leader John Thune (R-S.D.), expressing confusion about Trump’s statement. Sen. John Cornyn (R-Texas) pointed out that the program’s origins traced back to Trump’s own administration, citing successful investments from “TSMC, Samsung, and Micron” as evidence of the law’s effectiveness.

Senior Republican aides quickly signaled that Trump’s call for repeal would gain little traction in Congress. 

“We have too many other items to deal with that are higher on the list,” one top Republican leadership aide told the Hill, while another emphasized, “I don’t see a huge appetite for that.”

The $280 billion bipartisan legislation, signed into law by President Biden in 2022, has already spurred semiconductor manufacturing projects across roughly two dozen states — with development particularly focused in red states. Sen. Todd Young (R-Ind.), the lead Republican architect of the legislation, expressed surprise at Trump’s position, noting it contradicted previous assurances from Trump’s own Cabinet nominees.

House Speaker Mike Johnson, who initially stood to applaud Trump’s remarks, has his own complicated history with the legislation. Last October, he had to walk back suggestions about repealing the Act after realizing its popularity in battleground districts. Johnson now says Republicans will wait to see Trump’s budget proposal before making any decisions about potential changes to the law.

With Republicans holding 53 Senate seats and the law requiring 60 votes for repeal, coupled with its demonstrated success in attracting semiconductor investments in mostly red districts, Trump’s critique appears unlikely to translate into legislative action. The law continues to enjoy broad bipartisan support for its role in strengthening national security and reducing dependence on foreign chip manufacturing.