‘China Threat’ May Secure Biden’s Legacy
TL/DR –
President Trump’s plan to undo his predecessor’s initiatives poses a significant challenge to billions of dollars of investments in clean energy and technology infrastructure initiated by the Biden administration. In his inaugural speech, Trump targeted the 2022 Inflation Reduction Act (IRA), one of President Biden’s key pieces of legislation, pledging to “end the Green New Deal”. Experts, however, believe that large parts of both the IRA and the 2022 CHIPS and Science Act — which unlocked billions of dollars to incentivize semiconductor and renewables manufacturing in the U.S. — could survive, largely because they support jobs and investment in both Republican and Democrat districts.
Trump Administration’s Policy Shifts Put Billions in Clean Energy Investments at Risk
President Trump’s intention to reverse his predecessor’s policies has clouded the future of billions of dollars in clean energy and technology infrastructure investments started under President Biden. The future role of China in these developments is also predicted to be significant.
Trump Targets Biden’s Green New Deal
In his inaugural speech, Trump specifically targeted the 2022 Inflation Reduction Act (IRA), one of Biden’s major legislative achievements, vowing to “end the Green New Deal.” Later that day, he signed an executive order commanding all agencies to “pause” the dispersal of IRA funds until after a review.
Expert Opinions on Future of IRA and CHIPS Act
Despite these actions, experts believe large portions of both the IRA and the 2022 CHIPS and Science Act could survive. These laws, which unlocked billions to incentivize semiconductor and renewable energy manufacturing in the U.S., are favored because they support jobs and investment in both Republican and Democrat districts. However, these laws will now have to highlight their role in challenging China’s dominance of key supply chains instead of their climate crisis mitigation efforts.
CHIPS Act Funds Rushed Out Before Trump Takes Over
In the final weeks of the Biden administration, efforts were made to protect the impact of the CHIPS Act, a $52 billion initiative aimed at reviving advanced chip manufacturing in the U.S. through grants, loans, and tax credits. Following Trump’s electoral victory in November, the CHIPS Program Office finalized loans and grants to several domestic and foreign companies.
Future of IRA Under Threat
The IRA, however, faces a more uncertain future. The Republican-led House of Representatives has repeatedly voted to repeal parts of the law over the past four years. Trump has pledged to end the electric vehicle mandate, which likely includes the $7,500 consumer tax credit for electric vehicles, a key part of the IRA. This mandate has played a crucial role in encouraging automakers and their suppliers to procure materials from the U.S. or friendly countries to meet strict sourcing requirements.
China’s Role in Protecting IRA and CHIPS Act
The threat posed by China could help to defend offices like the LPO against attacks. Emphasis on the “geopolitical competition with China” and the need to catch up with its “scaled up government-subsidized manufacturing” was heavy in a roundup of the LPO’s work released on the last day of the Biden administration.
Future of Clean Energy Policy
Posing such proposals as challenges to China could assist advocates in garnering the support needed to pass legislation, while also allowing Republicans to claim credit when new factories are operational. “There’s going to be a lot of ribbon cutting going on with all the construction,” says Sujai Shivakumar, an expert on innovation policy at the Center for Strategic and International Studies. “If [the Trump administration] were politically savvy, I’d imagine they’d be out there with their scissors.”
—
Read More US Economic News