US Sets Next Stage For $250bn Bill To Counter China Tech

Matthew Broersma,
The US Congress, Senate, Capitol, US government, House of Representatives

US Senate set to resume debate of $250bn US Innovation and Competition Act that looks to counter the global influence of Chinese technology

The US Senate is set next week to resume debate around a sweeping $250 billion (£176bn) funding package that aims to counter China’s influence in global technology.

The Senate sought to pass the bill, which has bipartisan support, last Thursday, but Republicans delayed passage over the time allocated to consider amendments.

Senate Majority Leader Chuck Schumer said on Friday debate of the bill would resume on Tuesday, 8 June.

The US Innovation and Competition Act of 2021 (USICA) includes $190bn to strengthen US technology against Chinese competition, as well as $54bn specifically to increase domestic production of semiconductors and telecommunications equipment.

samsung chinaChip shortage

US automakers, like those around the world, have been hit by a global shortage of semiconductors triggered by chaotic market conditions during the pandemic.

The EU is also seeking to boost domestic semiconductor production under the “2030 Digital Compass” plan, for similar reasons.

The US legislation also seeks to counter China’s influence through diplomacy, working with allies and increasing US involvement in international organisations.

Under the previous administration the US launched a trade war with China in 2018, and relations between the two countries remain on edge.

The US notably brought in wide-ranging sanctions against Chinese telecommunications giant Huawei, pressuring allies not to use Huawei’s 5G equipment and initiating the arrest in Canada of Huawei chief financial officer Meng Wanzhou in December 2018.

Tech competition

The sanctions also targeted other Chinese companies, including chipmaker SMIC.

Strengthening competition against China is one of the few issues on which the US’ two main parties agree.

However, the parties disagreed over how much time was consider amendments and which amendments would be voted on.

The proposed amendments include one from Republican Senator Ron Johnson that would call for the construction of a wall on the US border with Mexico.

The bill must also be approved by the House of Representatives before being returned to the White House for passage into law.