Cailian News Agency, November 4th (Editor Xiaoxiang) Regardless of whether it's Biden, Harris, or Trump, they are all eager to see the reshoring of American manufacturing; however, under the same goal, the paths taken by the two parties seem to be completely different - the Biden administration is committed to using attractive subsidies to promote the establishment of factories for global leading enterprises in the U.S. and to accelerate the restructuring of the American industry chain; while Trump is keen on using a blunt tariff stick to implement his 'America First' strategy.

Behind this significant difference, many American industry professionals are worried that the factory construction boom that Biden barely triggered through subsidies during his tenure may come to a halt once Trump takes office...

Data shows that after adjusting for inflation, the private fixed investment in manufacturing construction in the third quarter of the U.S. reached an annualized rate of $236 billion. This number is more than twice the peak value during Trump's presidency. The last time U.S. factory investment grew so rapidly was during the peak of the space race in the 1960s.

This prosperity is clearly related to the 'Chip and Science Act' and 'Inflation Reduction Act' introduced during Biden's tenure - the former providing $53 billion in subsidies and tax breaks for semiconductor manufacturing facilities, and the latter authorizing tax breaks and loans of hundreds of billions of dollars for low-carbon technologies. President Biden signed these two bills in 2022.

Ernie Tedeschi, chief economist of the Biden Economic Advisory Committee and economist at Yale University's Budget Lab, said, 'These two bills have been hugely successful; I think they even exceeded the initial expectations of the Biden administration.'

Trump's team may 'crash the party.'

Biden's 'Chip and Science Act' aims to expand America's semiconductor manufacturing base, which is crucial to countless products from cars to artificial intelligence (AI) systems and military hardware, while reducing dependence on goods from geopolitically sensitive regions. The 'Inflation Reduction Act' aims to accelerate the transition to low-carbon energy, while supporting the domestic manufacturing of complementary equipment like electric cars and batteries.

However, Trump apparently sneered at these two pieces of legislation. In his view, these laws are all about giving away money for nothing, and the more 'direct and effective' way is actually to impose tariffs.

On October 26, Trump said in a podcast interview, 'We have invested billions of dollars to allow wealthy companies to participate and borrow money (from them) to establish chip companies here, but they will never give us back some excellent businesses. When I see that we spend a lot of money to make people manufacture chips, I think this is not the way... you could have achieved this through a series of tariffs.'

Currently, Trump has promised to achieve his advocated 'manufacturing revival' by reducing taxes, relaxing regulations, and imposing tariffs of 10% to 20% on commodities imported from other parts of the world. As for the two major bills during Biden's term, it seems that both Trump himself, advisers in his campaign team, and even some Republican members of Congress are inclined to 'kill' them after taking office...

The latest statement occurred last Friday - Republican Speaker of the House of Representatives Johnson stated that if Republicans control Congress after this election, they may seek to repeal the 'Chip and Science Act'. Harris's campaign team quickly shared the video. Johnson later clarified that the 'Chip and Science Act' is not on the agenda to be abolished, but Republicans may seek to further simplify and improve the main purpose of the law by canceling regulatory and environmental provisions.

Earlier, in a speech to the New York Economic Club in September, Trump also vowed to 'revoke all unspent funds under the misleading 'Inflation Reduction Act'. In a recent interview, 'Wall Street's Bear King' Paulson, a potential financial candidate in the Trump administration, also stated that he will work with Musk to cancel the green energy subsidies in the 'Inflation Reduction Act'.

Can Trump really trigger a 180-degree turn?

Many economists surveyed by the media recently predicted that once Trump is elected, his policies may result in a lower number of manufacturing jobs than when Harris is elected.

Democrats also state that Trump is putting American manufacturing in danger. Matt Corridoni, a spokesman for Harris's campaign team, points out that Trump is threatening to withdraw subsidy funds and cancel thousands of manufacturing jobs nationwide.

Of course, it is not clear whether or not Trump will cut subsidies. The future Trump administration is unlikely to retract funds or loans that have already been distributed. Refusal to acknowledge the tax deductions under the "Inflation Reduction Act" will require legislative changes, even if the Republicans can control both houses of Congress, Trump is unlikely to achieve this. The "Chip and Science Act" had bipartisan support in the past.

Tedeschi believes that even though Trump may find it difficult to completely overturn legislation, he may stop or delay the use of unfunded funds after taking office, which could disrupt planned projects.

The total preliminary funding announced by the US Department of Commerce in the chip sector is 36 billion US dollars, to support companies such as Samsung, Intel, Taiwan Semiconductor, GlobalFoundries, and Micron Technology building chip plants in the USA. Currently, only 0.123 billion US dollars have been disbursed, which is the funding provided to Polar Semiconductor last month.

James Lewis, a technical expert at the Center for Strategic and International Studies, said that Trump may not be able to abolish the "Chip Act," but he may prevent the expected second round of funding. "This would be very unfavorable."

In addition, although tariffs planned by Trump may help some domestic manufacturers compete with imported goods, economists say that these tariffs will also increase the input costs needed to produce finished products in US factories and trigger retaliatory measures from trade partners. Peter Harrell, a researcher at the Carnegie Endowment for International Peace, said, "Imposing a 20% tariff on such products will definitely attract the attention of companies looking to start and operate chip factories."