Kamala Harris wants the US to “win the race in AI and quantum computing” — but Trump isn’t so sure
During last night’s presidential debate, Vice President Kamala Harris said said She wants to “win the race in AI and quantum computing.”
Harris elaborated on her point, stating that her policy toward China is aimed at ensuring the U.S. “wins the competition for the 21st century” by investing in “American technology.” She then turned her attention to former President Donald Trump, saying that under his presidency, American chips were sold to China and used to modernize the military.
In his rebuttal, Trump claimed that China “bought their chips from Taiwan” and that “we hardly make chips anymore because of philosophies like theirs.”
A chip change or a chip from the old block?
During his presidency, one of Trump’s key policies was to increase U.S. exports to China to $200 billion in 2020 and 2021. While this target was not met, one of the major exports that did contribute somewhat to this goal was sales of semiconductors and their manufacturing equipment, accounting for nearly 25% of China’s total merchandise imports. under Trump’s import agreement.
Trump also placed Huawei on a national security list, imposed sanctions to limit sales of U.S. semiconductors that could potentially be used in Huawei’s 5G base stations, and banned the purchase of Huawei equipment for use in network infrastructure outside the U.K. and Australia. The restrictions did not, however, stop Huawei from buying semiconductors from companies headquartered outside the U.S., such as Samsung — headquartered in South Korea — and the Taiwan Semiconductor Manufacturing Company (TSMC).
Following the election of President Joe Biden, the CHIPS and Science Act was signed into law in August 2022 – a piece of legislation made up of two bipartisan bills aimed at both boosting domestic technology research and U.S. semiconductor manufacturing. The CHIPS and Science Act has so far earmarked $280 billion in funding, consisting of grants, investment tax credits, and other incentives, resulting in a number of semiconductor manufacturers taking the first steps into U.S. manufacturing and research facilities, including TSMC to build new factory in ArizonaAnd Intel invests in new locations in Arizona, New Mexico, Ohio and Oregon.
In October 2022, tougher sanctions were also introduced, preventing U.S. companies from exporting advanced semiconductors to China. In 2023, more restrictions were introduced to plug export gaps. The unfortunate downside of restricting exports to the world’s second-largest economy is that some U.S. companies have lost a market that provided a significant portion of their revenue. In addition, China has imposed its own export restrictions to hamper U.S. efforts to produce semiconductors domestically.
While the CHIPS and Science Act and the tough export restrictions were signed by Biden, they provide a good foundation for Harris’s potential policy outlook on China and how America “wins the competition for the 21st century.”
