Type to search

US House Passes China Competition Bill Along Party Lines

The America COMPETES Act aims to increase US competitiveness with China and boost US semiconductor manufacturing. Now comes the difficult task of reconciling with the Senate version.

The US Senate began debate on Tuesday on a new defence spending bill that targets China and Russia, plus ramping up assistance to Taiwan and Ukraine.
The Taiwan Policy Act passed by the US Senate foreign relations panel includes billions of dollars in military financing for Taiwan and programmes to fast-track weapons sales and increase military coordination. Reuters file photo.


The US House of Representatives narrowly passed a multi-billion-dollar bill designed to bolster competitiveness with China and boost US semiconductor production capacity. In a 222 to 210 vote, on February 4, Democrats passed the America COMPETES Act of 2022, with only one Republican voting in favor.

The Senate bill, the US Innovation and Competition Act, passed 68-32 in June 2021, with 18 Republicans voting in favour.

With the House version passed, the bill’s supporters in the House and Senate now must negotiate to make their two versions of the bill the same – not an easy task and not one that is guaranteed to succeed. The two chambers must agree on one bill, vote on both again, and then send the unified bill to President Biden. If Biden signs, it becomes law.

If the House and Senate cannot agree, the bill never makes it to the president’s desk, as seems to be the fate of the Build Back Better Act, for example.

But, backers of the America COMPETES Act remain optimistic.

“There is a lot of energy to get this done, so I believe it will get done and will probably look similar to the infrastructure bill where we were able to get pretty solid bipartisan support,” said Nick Martin, a spokesperson for Washington state representative Suzan DelBene, chair of the 97-member New Democrat Coalition and vice-chair of the House Ways & Means Committee, which has jurisdiction over trade policy.

The House bill includes $52 billion to subsidize semiconductor manufacturing and research of the key components used in autos and computers. It also allocates $45 billion over six years to ease supply chain problems that have exacerbated shortages.

It also includes changes to US trade regulations, such as strengthening anti-dumping rules, intended to counter what the US considers to be China’s market-distorting trade practices.

The bill would authorize $8 billion in US contributions to the Green Climate Fund, established by the Paris Agreement, to help developing countries cope with the implications of climate change.


Self-Sufficiency Goal

House Speaker Nancy Pelosi told reporters before the vote that she intended to begin negotiations with the Senate quickly.

“It is about making America… self-sufficient when it comes to the supply chain, so that we’re not depending on other countries,” she said.

House Republicans complain that Democrats did not include them in drafting the legislation. They harshly criticized climate provisions, claiming they could be used to help Beijing and accused Democrats of adding the China trade measure to the bill as a way to advance parts of Biden’s economic agenda that could not pass the Senate.

House Democrats said Republicans had refused to engage with them while they wrote the legislation.


  • Reuters, with additional editing by Neal McGrath




US Bill On Chip-Making And China Trade Is Close: Pelosi


US Chamber Calls For New Trade Deals, China Strategy


China Fell Short on Trade Pledge in Dilemma for Biden – WSJ



Neal McGrath

Neal McGrath is a New York-based financial journalist. Neal started his career covering the Asia-Pacific region for the Economist Intelligence Unit, then joined Asian Business magazine. He's subsequently held a variety of editorial positions covering business, economics, finance and sustainability. Neal has lived and worked in Hong Kong, Singapore, Germany and the US.


AF China Bond