AFL-CIO strongly backs U.S. House bill on China competition, chips

7:53 pm Monday, January 31st, 2022

By David Shepardson

WASHINGTON (Reuters) -The largest U.S. labor organization said Monday it strongly supported a U.S. House of Representatives bill designed to improve competition with China, boost U.S. semiconductor production and reform key trade provisions.

The AFL-CIO trade federation representing 12.5 million workers said in a letter to lawmakers the bill’s $52 billion for chips is critical to “addressing the current chip shortage that continues to adversely impact production in the automotive sector and elsewhere.”

The U.S. House plans to take up the bill later this week. On Tuesday, the House Rules Committee is set to consider more than 500 proposed amendments to the bill including one from Representatives Alexandria Ocasio-Cortez and Cori Bush that would bar semiconductor firms receiving government subsidies from paying dividends or repurchasing company stock.

On Wednesday, Commerce Secretary Gina Raimondo will speak to House Democrats about the importance of the legislation, according to an invitation seen by Reuters.

The union said the bill “will provide critical and overdue enhancements to America’s global competitive capabilities, support workers whose jobs are lost to trade, and protect and expand the tools to fight foreign unfair trade.”

The U.S Chamber of Commerce said it was pleased the House “is now starting the process of considering its version of this legislation. House action is an essential step in producing a bill that can be signed into law.”

Majority Leader Steny Hoyer said on Friday that the House would vote on the 2,900-page bill, called the “America Competes” act. The bill authorizes $45 billion to support supply-chain resilience and manufacturing of critical goods and industrial equipment.

President Joe Biden’s administration is pushing Congress to approve funding to subsidize chip production in the United States, as shortages of the component used in vehicles and computers have exacerbated supply-chain bottlenecks.

The Senate passed the U.S. Innovation and Competition Act last year, which includes $52 billion for chips and authorizes $190 billion to strengthen U.S. technology and research to compete with China.

The House bill has some differences with the Senate version. If approved, leaders of both chambers will negotiate to resolve differences.

The AFL-CIO backed a new review process to protect supply chains “by screening outbound investment and guarding against offshoring of critical capabilities to adversaries like China and Russia.”

The group added “from semiconductors to pharmaceutical ingredients, it will provide a needed review mechanism to advance U.S. production and employment.”

(Reporting by David Shepardson; additional reporting by Patricia Zengerle ; Editing by Bernadette Baum and Stephen Coates)