The bill provides about $50 billion in subsidies to boost U.S chip-making for new vehicles. The bill is a bipartisan effort and overcame a crucial procedural obstacle with a 64-34 vote late Tuesday. The bill needs one final vote from the House of Representatives before it can reach President Joe Biden. An increase in domestically produced chips would increase car inventory, stabilizing the industry in North America.
The production of new vehicles has slowed down in 2022 as a significant shortage of chips has been noted. Many chip production facilities are overseas and waiting to deliver raw materials. The Biden administration believes that a larger domestic chip industry will decrease the need for foreign markets.
Just one year ago, the Senate approved a similar $250 billion bill that would support U.S. chip-making and invigorate American research and development, but it did not make it past the House. Instead, House Democrats created a bill that focused on competition with China and a great emphasis on climate change which Republicans opposed.
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