(Bloomberg) -- The US can’t keep relying on Taiwan for semiconductors and needs to pass legislation to support the domestic production of high-end computer chips, Commerce Secretary Gina Raimondo said.
“Our dependence on Taiwan for chips is untenable and unsafe,” Raimondo told a crowd at the annual Aspen Security Forum in Colorado, a gathering of White House officials, diplomats and executives. She appeared via video conference from Washington, DC.
“This is a Sputnik moment for America,” Raimondo said, referring to the Chips Act, a more than $50 billion package intended to increase the manufacturing of American-made semiconductors. “I mean that very sincerely. And this is a project we’re working on.”
Congress has been discussing legislation to strengthen the nation’s technology sector for more than a year, but the centerpiece of that plan is still up in the air amid House and Senate disagreements over the substance of the package. Senate Minority Leader Mitch McConnell also said last month that no bill would go forward so long as Democrats were pursuing a $1 trillion tax measure to fund climate change spending and other measures.
A bipartisan version of the bill on track for votes next week in the House and Senate was estimated to increase US budget deficits by $79 billion over a decade if enacted, according to the Congressional Budget Office.
Read More: Senate’s Bipartisan Chips Bill Would Add $79 Billion to Deficit
Speaking on a later panel at the Aspen event, economist and former US Treasury Secretary Lawrence Summers stressed that the US needed to pass the legislation for geopolitical reasons. He compared US reliance on Taiwan to European reliance on Russian gas imports, which have given Moscow leverage following its invasion of Ukraine.
“People look at Germany and they go, ‘How could they have been so reliant on Russian natural gas?’” Summers asked the crowd. “They’re going to look at us and they’re saying, ‘How could we have been so reliant on Taiwanese semiconductors?’”
China Competition
Raimondo also discussed the Biden administration’s economic strategy toward China, saying the US needed to boost investment at home while also trying to reduce China’s edge.
She said the US needs to protect American intellectual property and defend US companies from “unfair practices” -- including Chinese dumping of cheap steel and aluminum into the US -- while also trying to level the playing field for US companies and help them better access the Chinese market.
“There’s only so much we can do to slow down China, and we need to do that,” she said. “We need to be clear minded about our export controls, deny China technology from the US that will allow them an edge, and enforce that, and we are doing that.”
Appearing alongside Summers on the later panel, Robert Zoellick -- the former US Trade Representative and World Bank president -- referred to Raimondo’s comments and warned that US policy on China has been “schizophrenic” as it veers between punishing China and opening up to the world’s second-largest economy.
“In her words, we want to slow them down, we want to disconnect from them, while at the same time to open markets -- that’s a difficult trick to pull off,” he said. “In a sense, we haven’t decided as a country. Do we really want to open markets in China, and do more business? Or do we want to try to contain and isolate them, which will be very costly.”
©2022 Bloomberg L.P.
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