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House tees up vote on China competitiveness bill

The legislation invests billions of dollars in American manufacturing and aims to bolster the supply chain.

WASHINGTON (CN) — The House took up a massive piece of legislation this week that would provide billions of dollars for American production, innovation and technology research with the goal of combatting China's dominance in the manufacturing sphere.

Known as the America COMPETES Act, the bill aims to make the United States more competitive against China's expanding economic power as well as resolve issues plaguing the economy, including supply chain bottlenecks and a worldwide shortage of semiconductors — small chips that store data and are critical to the production of everything from cars and medical devices to computers and appliances.

A shortage of semiconductors, spurred in 2020 by changes in product demand and access to resources due to the pandemic, continues to linger.

The legislation would invest $52 billion over five years for semiconductor research and manufacturing in the United States.

While some private companies are already making massive investments in American-made semiconductors, many lawmakers on both sides of the aisle have said a federal investment is critical to expanding U.S. manufacturing.

The U.S. share of the semiconductor market has shrunk over the years, declining from 37% in 1990 to 12% in 2021, according to the Semiconductor Industry Association.

The pending legislation also targets the supply chain, giving $45 billion over six years for improvements to the network and $600 million a year through 2026 to incentivize domestic solar production.

It would also establish a Supply Chain Resiliency and Crisis Response Office that would identify issues in the supply chain, determine which products are critical to the economy and develop stockpiles for future supply disruptions.

A similar bill, the United States Innovation and Competition Act, passed the Senate with some bipartisan support back in June and includes the same semiconductor investment in addition to massive investments in research and supply chain supports.

However, the House is considering its own version of a competitiveness bill, which if passed, will force lawmakers to reconcile the differences between the House and Senate versions of the legislation.

The mission of making U.S. production more competitive on the world stage has broad bipartisan support, but lawmakers within, and between, both chambers have disagreed over what specific policies could achieve that goal.

One policy that was nixed from the Senate's legislation but remains in the House's bill would give the Office of the US Trade Representative the power to review U.S. companies who are moving manufacturing abroad and, in some cases, block a move overseas if doing so might threaten national security or the stability of the supply chain.

House lawmakers were still tweaking the legislation Thursday, considering a docket of more than 260 amendments to the already sweeping bill.

More than 200 of those amendments were approved, addressing a variety of topics from climate change to human rights.

Some of the notable additions to the legislation include adding torture to the list of human rights violations that can trigger the president to issue sanctions, a requirement that large companies seeking semiconductor funds provide demographic data on the racial makeup of their workforce and a stipulation that bars military funds from going to foreign security forces with a history of human rights abuses.

A series of amendments focused on China and authored by Senator Dan Crenshaw, a Republican from Texas, also made it into the final version of the bill.

Crenshaw's provisions ask for a classified report on "what is needed to bypass China's 'great firewall' and provide uncensored media to the Chinese people," an annual briefing to Congress on China's progress to lower greenhouse gas emissions, and a report analyzing the negative impacts of China's 'One Belt, One Road,' program, which invests in infrastructure across multiple continents as a means of expanding China's influence.

Among the provisions that failed to pass the chamber was an amendment by Democratic Senator Jamaal Bowman and Democratic Senator Pramila Jayapal, which would have mandated a State Department and Department of Energy report on how U.S. sanctions on countries affect climate change, wealth distribution and innovation in those nations.

The slew of late-day amendments pushed debate over whether to pass the legislation into Friday, when the House is expected to vote on the competitiveness bill.

Speaker of the House Nancy Pelosi has expressed confidence that the legislation will pass despite its lengthy journey to a vote in the House.

"The inputs of the technologies that we rely on each day, and those that will take us into the future, must be made here, in America – or else we will be at the mercy of those other countries, driving up costs for American families and eroding our global competitiveness," Pelosi said on the House floor Wednesday.

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