Mar 20, 2022 - Politics & Policy

Trump officials enlisted on China competition bill

H.R. McMaster and Matthew Pottinger are seen in a side-by-side photo array
Former Trump administration officials H.R. McMaster (left) and Matthew Pottinger. Photos: Florian Gaertner/Photothek via Getty Images (left); Jabin Botsford/The Washington Post via Getty Images

The Biden administration is enlisting former Trump officials on Monday to convince Congress to pass legislation bolstering America’s semiconductor industry.

Why it matters: Officials believe the bill will make American manufacturing more competitive with China. By coordinating with Trump officials, the Biden team is trying to depoliticize and add urgency to the legislation.

  • The bill has stalled because of differences between the House and the Senate on how much — and where — to spend billions of dollars to strengthen America's supply lines.

Driving the news: Commerce Secretary Gina Raimondo is hosting H.R. McMaster, President Trump’s former national security adviser; Matthew Pottinger, another Trump NSC official; Eric Schmidt, the former CEO of Google; and members of Congress, including Sen. Todd Young (R-Ind.), on Monday for a virtual conversation about semiconductor manufacturing.

  • “This is clearly a national security issue, so we’ll be bringing together experts from both sides of the aisle, including Trump supporters,” Raimondo told Axios. “Every day that we wait is a day that we fall behind.”
  • “Best-case scenario is we get this done in the next couple of months,” she said. “The worst-case scenario is nothing happens.”

The backstory: Last week, Senate Majority Leader Chuck Schumer (D-N.Y.) took a procedural step to resolve differences between the House- and Senate-passed versions.

  • Both bills include some $52 billion to incentivize companies to build semiconductor manufacturing facilities in the U.S.
  • The Senate bill, which received 18 Republican votes, totaled $250 billion, and included money for other industries on the front lines of the U.S-China rivalry. In addition, it had funding to overhaul the National Science Foundation.
  • The House version grew to $335 billion and includes money for workers whose jobs have been outsourced, in addition to environmental and trade provisions. Only one Republican supported it.

The big picture: President Biden and his Cabinet have been hosting almost weekly events to press Congress to act on a China competitiveness bill.

  • He's also sought focus on his long-term proposals to address supply chain snarls that have led to the highest inflation in more than 40 years, especially in battleground states.
  • For a short-term fix, the White House considered, then rejected, sending Americans gas cards, Axios' Sophia Cai reported on Saturday.
  • On Monday, the president will address CEOs from a variety of industries at the Business Roundtable. He'll talk about his plans to lower costs and create union jobs.

Between the lines: The CEOs of ExxonMobil and ConocoPhillips, along with other executives, have been invited to the White House for a separate event with senior Cabinet and economic officials on Monday, people familiar with the matter tell Axios.

  • Biden officials have been warning oil and gas producers not to use high oil prices as a way to gouge customers at the pump.
  • A White House official said other expected attendees include clean-energy companies (Pattern and Invenergy) and refiners (Marathon Petroleum), as well as financial services (Visa, JP Morgan, Bank of America), food/agriculture (Land O’Lakes, Cargill) and manufacturing firms (Dow, U.S. Steel).

Go deeper: Lawmakers have been arguing that the war in Ukraine, and Western sanctions against Russia, have revealed the vulnerability of America’s supply lines, especially in semiconductors — used in everything from fighter jets to refrigerators.

  • Raimondo is trying to drive home a similar point.
  • “In three weeks, we have massively disrupted Russian military operations and economy by cutting off their access to crucial technology,” she said.
  • “I shudder to think what other countries can do to the United States of America, with so many of our semiconductors produced outside of the country.”
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