
Lutnick on June 4. Photo: Sha Hanting/China News Service/VCG via Getty Images
Commerce Secretary Howard Lutnick this week told Congress that the Trump administration is renegotiating some CHIPS Act awards, and some previously approved deals likely won't survive.
The big picture: Lawmakers widely see the program to boost domestic semiconductor manufacturing as key to competing with China.
What they're saying: "Are we renegotiating? Absolutely, for the benefit of the American taxpayer, for sure," Lutnick told lawmakers on the Senate Appropriations Commerce panel Wednesday.
- "All the deals are getting better, and the only deals that are not getting done are deals that should have never been done in the first place."
Context: President Trump has often trashed the CHIPS and Science Act, calling it a "horrible, horrible thing" during his March speech to Congress.
- Under former President Biden, lawmakers appropriated the money for the grants and contracts were signed for the grants. But money only just started to go out by the time he left the White House.
- Axios in March reported that Lutnick was brainstorming how to change the CHIPS Act and had been looking for ways to target requirements the administration considers "woke," such as making manufacturers provide child care for their workers.
Lutnick also briefly addressed the administration's plans to issue new guidance after scrapping the Biden-era AI diffusion rule, which would have created a licensing regime for exporting advanced AI chips and divided the world into tiers.
- "The AI diffusion rule was very confusing ... It was illogical. It was hastily rushed through at the very end of the Biden administration," Lutnick said.
- "Our view is we are going to allow our allies to buy AI chips provided they're run by an approved American data center operator and the cloud that touches that data center is an approved American operator."
