The Biden administration has framed the bill as necessary to help the U.S. economy better compete with China.

“This bill is essential to our economy, our workers, our national security, and will unleash the next generation of innovation and scientific advancement in the United States,” says Commerce Secretary Gina Raimondo.

House lawmakers now will negotiate with the Senate, which passed a similar bill, the U.S. Innovation and Competition Act, last June that would also direct $52 billion toward semiconductor manufacturing, but with differences on other points. 

Amendments to the COMPETES Act add provisions similar to parts of the stalled Protecting the Right to Organize (PRO) Act that would impact labor negotiations.

In a letter to House Speaker Nancy Pelosi (D-Calif.) and Minority Leader Kevin McCarthy (R-Calif.) before the vote, the Associated General Contractors of America urged representatives to vote against the bill, writing that it would in some cases eliminate workers’ rights to use secret ballots in union representation elections, and add “artificial and unrealistic time constraints” to collective bargaining. 

The Association of Equipment Manufacturers, which includes those in construction, praised the bill’s funding for supply chains and chip production, but Kip Eideberg, AEM senior vice president of government and industry relations, said in a statement that it “still needs a lot of work” and that lawmakers need to establish a transparent process for equipment makers to petition for tariff exclusions.

Unions including the AFL-CIO and International Brotherhood of Teamsters support of the bill. North America’s Building Trades Unions did not immediately respond to an inquiry from ENR. Teamsters General President Jim Hoffa said in a statement that the bill would bring manufacturing jobs back to the U.S. “I urge the Senate to adopt these pro-worker trade reforms when both chambers work out differences between the two bills,” he said.

Some of the more controversial provisions may not survive the negotiations. Raimondo emphasized the importance of moving the bill quickly, saying she wants the legislation passed in a matter of weeks, not months.

“There are parts of these bills that some people aren’t happy with,” she says. “But that’s not an excuse for inaction or foot-dragging or letting the perfect be the enemy of the good. Delay is the biggest enemy we have right now.”

Portions of the legislation relating to trade may be its most contentious pieces, even more than the union issues. Rep. Stephanie Murphy, (D-Fla.), the lone Democrat who voted against the COMPETES Act, highlighted its trade section in a statement outlining her opposition.

“The House bill does more to limit trade than to enhance trade, even though expanded trade helps far more American workers than it hurts, reduces the prices that American consumers pay for goods and services, and is a powerful weapon in our strategic competition with China,” she said.

Sen. Todd Young (R-Ind.), the lead Republican sponsor of the U.S. Innovation and Competition Act, said in a statement that he was disappointed House lawmakers did not take work on a bipartisan bill the way senators did last year.

“As we head to a conference process, my hope is that the final legislation will reflect the Senate bill and give House Republicans a much better option to support,” he said. “The Senate-passed bill focuses directly on confronting China and getting legislation like USICA across the finish line will ensure the United States leads the world into the future.”

The U.S. Chamber of Commerce also said the legislation features several “harmful provisions” around trade issues, including one adding new reviews of some outbound investments, one making changes to antidumping and countervailing duty laws and another impacting imports that it says would add supply chain bottlenecks, among others. The Chamber did express support for plans to fund semiconductor production and supply chain resilience.

Semiconductor shortages have had spiraling economic effects, impacting manufacture of various goods, from cars to video game consoles. The U.S. share of global semiconductor manufacturing capacity dropped from 37% in 1990 to 12% in 2021, according to the Semiconductor Industry Association. The group says U.S. government investment in chip research has remained mostly flat, while other countries have increased their own investments. 

Meanwhile, chip producers have been moving to increase U.S. production.

Intel announced last month that it would build a $20-billion complex with two chip plants, known as “fabs,” in Ohio, and it plans to open another in New Mexico. Both Intel and Taiwan Semiconductor Manufacturing Corp. are building new fabs in Arizona. Samsung shared plans in November to build a fab outside of Austin, Texas. 

Al Thompson, Intel vice president of government relations, urged lawmakers to work quickly to reach an agreement. “Funding the CHIPS Act is critical to level the playing field with global competitors, protect our domestic supply chain, and invest in U.S. jobs and manufacturing."