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Biden finalizes $6.6bn CHIPS Act grant to TSMC ahead of Trump administration

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The Biden administration has finalized a $6.6 billion CHIPS Act grant for Taiwan Semiconductor Manufacturing Co. (TSMC), just two months before President-elect Donald Trump takes office.

Senior administration officials reported that the grant funds will be disbursed in phases as TSMC achieves project milestones, with at least $1 billion expected to be released by year’s end.

As part of this investment, TSMC will manufacture 3-nanometer, 2-nanometer, and A16 chips at three new factories in Arizona, bringing the company’s total U.S. investment to $65 billion. The first Arizona facility will also produce 4nm and 5nm chips, with high-volume production slated to begin in early 2025. The second and third fabs are set to commence production in 2028 and by the end of the decade, respectively.

Nanometer technology refers to the distance between transistors on a chip, with a smaller number typically indicating a more advanced and powerful chip.

“For the first time, we can say that we will be making these breakthrough chips in the U.S.,” U.S. Commerce Secretary Gina Raimondo stated in a Thursday briefing.

TSMC has also confirmed that yield rates—a key metric of chip production efficiency—are as strong in Arizona as they are in Taiwan. “That is an incredible achievement,” Raimondo remarked, highlighting the challenge and significance of maintaining such standards in the U.S.

In addition to the $6.6 billion grant, TSMC will receive a $5 billion loan and qualify for an investment tax credit of up to 25% of capital expenditures.

The Taiwanese company is the second-largest beneficiary of the CHIPS Act after Intel, which received an $8.5 billion grant. Samsung of South Korea ranks third, securing $6.4 billion in funding.

The Biden administration has announced preliminary specifications for more than $36 billion of the $39 billion CHIPS Act manufacturing fund. TSMC is only the second project to reach final terms, following Polar Semiconductors, a U.S.-based semiconductor manufacturer awarded $123 million.

President-elect Trump has raised concerns about the future of the CHIPS Act, which is aimed at boosting semiconductor manufacturing within the U.S.. He has criticized the deal, calling it “very bad” and proposing tariffs as a tool to attract chip manufacturing back to the U.S.

A senior administration official told Nikkei Asia that final agreements leave “little room” for the incoming administration to alter terms, noting, “It’s a binding contract. As long as TSMC meets the milestones, the government is committed to moving forward.”

White House National Economic Adviser Lael Brainard, who co-chairs the CHIPS Implementation Steering Council, shared that additional grants are expected in the coming months. “Over the next two months, the Department of Commerce will finalize more awards, ensuring that the progress continues through the decade,” Brainard stated in Thursday’s briefing.

AMERICA

Marco Rubio’s views on China

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Marco Rubio, a U.S. Senator from Florida since 2011, has been appointed Secretary of State in the new Donald Trump administration. Known for his tough stance on Iran, Cuba, and Venezuela, Rubio has consistently positioned himself as one of the leading hawks against the People’s Republic of China.

During Donald Trump’s first term, Rubio was instrumental in pushing forward legislation that imposed sanctions on Chinese politicians and companies. These sanctions were justified as responses to actions taken by Chinese authorities in Hong Kong and Xinjiang. Rubio was also an early advocate for the Inter-Parliamentary Alliance on China (IPAC), a global network of lawmakers from approximately 40 parliaments that coordinates anti-China legislative efforts worldwide.

Rubio has accused Beijing of attempting to “undermine all the institutions and all the norms of the world” to further its pursuit of power. Peter Mattis, president of the Jamestown Foundation, has indicated that Rubio’s approach may involve a more aggressive stance on China-related issues than those of his predecessors. In retaliation, Beijing has imposed sanctions, including a travel ban, on Rubio due to his assertive policies.

National security vs. economic efficiency

In a 2020 interview with The Wire China, Rubio articulated that China is America’s strategic competitor, highlighting how Chinese companies are exploiting American capital markets to fund a totalitarian regime. “We’re going to redefine what critical industries are, and there’s going to be some protectionism around those industries worldwide after the pandemic,” he said, emphasizing how COVID-19 exposed the fragility of supply chains.

Rubio elaborated that while he supports capitalism, it must align with national interests. “One of the things that makes capitalism the best economic model in the world is that it allocates capital efficiently. However, there are situations where the most efficient outcome is not in our national interest,” he noted. As an example, he cited the production of active pharmaceutical ingredients (APIs), arguing that outsourcing these to China may be cost-effective but compromises U.S. national security.

Rubio referenced historical parallels, pointing to the U.S. decision to restrict Japan’s access to oil and resources before World War II as a trigger for Japan’s attack in December 1941. He warned that allowing China similar leverage over essential resources could increase the risk of armed conflict.

National Security and strategic sectors

Rubio distinguishes between Chinese companies with national security implications and those that do not. Telecommunications, biotechnology, artificial intelligence, and quantum computing are cited as sectors requiring American independence to mitigate reliance on China.

Supply chains and economic strategy

Rubio advocates for bringing supply chains back to the U.S. (onshoring) or relocating production to Central American countries such as El Salvador, Guatemala, Honduras, and Haiti. “We thought capitalism would change China; we didn’t think China would try to change capitalism,” he stated, suggesting that Xi Jinping’s aggressive policies are fueled by a perception of Western decline post-2008 financial crisis.

The 2024 Report: ‘The World China Made’

Rubio’s September 2024 report, The World China Made, challenges the narrative of a collapsing Chinese economy. While acknowledging structural issues, he warns against complacency, noting that China’s export- and manufacturing-led model has propelled it to the technological frontier despite its flaws. “An invincible belief in one’s own success breeds complacency, and the evidence before us contradicts that belief,” he wrote, emphasizing that China remains an existential threat to U.S. industry and workers.

The report also highlights China’s strategy of building factories in the Global South to bypass U.S. tariffs. “As trade barriers against Chinese products rise in developed countries, Chinese firms have targeted the Global South as an export market and production base,” the report states. Rubio points out that U.S. imports from the Global South follow an upward trend similar to Chinese exports.

Developing an effective strategy to counteract China’s engagement in the Global South is, according to Rubio, a sine qua non for a robust anti-China policy.

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Trump appoints Gaetz as Justice Secretary, Gabbard as Intelligence Chief

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U.S. President-elect Tulsi Gabbard has begun making new appointments to her cabinet, with former President Donald Trump taking to social media to announce these prominent selections.

Trump confirmed the appointment of one of his most loyal supporters, Matt Gaetz, a Florida Congressman, as Secretary of Justice. Gaetz, known for his strong conservative stance, has been at the center of various investigations, and some Republican senators have voiced reservations about his nomination.

“Matt will end gun-grabbing, secure our borders, dismantle criminal organizations, and restore Americans’ faith and trust in the Department of Justice,” Trump said in a statement.

Attorney General under scrutiny

Trump defended Gaetz’s record, citing his outspoken defense during previous investigations, where Gaetz actively opposed what he referred to as the “Russia hoax.”

In June, the House Ethics Committee launched an investigation into Gaetz over allegations of sexual misconduct, drug use, and obstruction of justice. Gaetz has denied any wrongdoing and has consistently maintained his innocence. The Justice Department spent two years investigating claims that Gaetz engaged in inappropriate conduct with a minor and violated federal sex trafficking laws. However, in 2022, the department closed the investigation without filing charges.

Israel lobby reacts to Gaetz’s appointment

Gaetz’s appointment has stirred reactions, particularly within the Israel lobby in the United States. In 2018, the Anti-Defamation League (ADL) and the Republican Jewish Coalition criticized Gaetz for inviting Charles Johnson, a known Holocaust denier, as his guest to the State of the Union address. Johnson had publicly expressed doubts about the Holocaust, controversially claiming that “only 250,000 died of disease” rather than 6 million Jews.

Gaetz denied that Johnson was a Holocaust denier, telling BuzzFeed: “He’s not a Holocaust denier and he’s not anti-Semitic. He’s a provocateur. I should have vetted him better before inviting him to the State of the Union; I regret that I didn’t. I take responsibility for that.”

Former Democrat Tulsi Gabbard to lead Intelligence Agency

In addition to Gaetz’s nomination, Trump announced former Democratic Congresswoman Tulsi Gabbard as the Director of National Intelligence.

“For more than two decades, Tulsi has fought for our country and the freedoms of all Americans,” Trump stated. Gabbard, a former representative from Hawaii, served in the National Guard and held her House seat from 2013 to 2021. In 2022, she left the Democratic Party and became an independent before aligning with the Republican Party. “She is now a proud Republican!” Trump added.

Gabbard gained national attention during the 2020 Democratic primaries. In 2017, she traveled to Syria and controversially remarked that Syrian President Bashar al-Assad “is not an enemy of the United States,” explaining that her visit aimed to “see and hear directly from the Syrian people.”

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Trump continues to fill his cabinet with Israel supporters

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President-elect Donald Trump continues to shape his cabinet, set to take office in January. Trump has nominated South Dakota Governor Kristi Noem to lead the Department of Homeland Security. She will work closely with Border Czar Tom Homan to “secure the border and ensure that our American homeland is safe from our enemies,” Trump stated.

Kristi Noem, a devout Christian and the first woman elected governor of South Dakota, is now in her second term. Reflecting on her leadership in South Dakota, Trump highlighted Noem’s dedication to border security: “Kristi has been very strong on border security. She was the first governor to send National Guard troops to aid Texas during the Biden Border Crisis—a commitment she’s upheld eight times.”

Noem has faced criticism for controversial remarks suggesting South Dakota’s indigenous tribes benefit from the drug cartel industry. This statement led to her being banned from all nine reservations in the state.

Although not a border state governor, Noem has consistently taken a tough stance on immigration. In 2010, she supported an effort to block the Obama administration’s lawsuit against Arizona’s immigration law. During Trump’s first term, she called for punitive actions against sanctuary cities that refuse to cooperate with federal immigration authorities.

Noem is also known as a strong supporter of Israel. Earlier this year, she signed a bill mandating that the International Holocaust Remembrance Alliance’s (IHRA) definition of anti-Semitism be used in discrimination investigations. The bill, titled “Ensuring the Safety of God’s Chosen People,” garnered praise from former Israeli Foreign Minister Israel Katz, who called Noem a “true friend of Israel.”

In March 2024, Noem faced a lawsuit from Travelers United, a consumer advocacy group, after endorsing a Texas-based cosmetic dentist without disclosing a financial relationship. Travelers United claimed Noem had begun “working as a social media influencer,” promoting services without transparency. Noem clarified on X (formerly Twitter) that she “never received any money” for these alleged endorsements.

New Israeli Ambassador Huckabee: ‘There is no such thing as a Palestinian’

Donald Trump announced that Mike Huckabee, former Arkansas governor, will serve as U.S. ambassador to Israel. A long-time ally of Israeli Prime Minister Benjamin Netanyahu, Huckabee has consistently supported Jewish settlers and backs Israel’s claim to annex parts of the occupied West Bank.

“Mike Huckabee loves Israel and the people of Israel. He will work tirelessly for peace in the Middle East,” Trump stated. Huckabee, an evangelical pastor and host on the Trinity Broadcasting Network (TBN), is a staunch defender of Israel’s historical rights in the West Bank and believes in Israel’s right to annex this region.

Fox News host Hegseth tapped to lead Pentagon

Trump’s selection of Fox News host and former military officer Pete Hegseth as head of the Pentagon surprised many. Hegseth, a vocal America First proponent, lacks traditional government or Pentagon experience, sparking discussion on Trump’s unconventional choice.

“Pete is tough, smart, and a true believer in America First. With Pete at the helm, America’s military will be great again, and our enemies will take notice,” Trump remarked.

Though Hegseth’s selection deviates from Trump’s other traditional security appointments, he has gained Trump’s respect through his book, The War on Our Warriors, which criticizes left-wing attitudes toward U.S. troops. Hegseth is a decorated Army combat veteran and former CEO of Concerned Veterans for America, a group funded by the Koch brothers that advocates for outsourcing veterans’ healthcare.

Hegseth also garnered Trump’s favor through his advocacy for the pardons of service members convicted of war crimes, including 1st Lieutenant Clint Lorance and Major Mathew Golsteyn.

CIA appointment: Ratcliffe’s anti-Iran stance

John Ratcliffe, former Director of National Intelligence, has been appointed CIA Director, reinforcing Trump’s hardline stance against Iran. Ratcliffe replaces Bill Burns, who led Biden’s attempts to broker ceasefires in Gaza.

An outspoken critic of Biden’s foreign policy, Ratcliffe has accused the administration of downplaying intelligence on Hamas to avoid escalation. He argues that deprioritizing Middle Eastern intelligence has left the U.S. vulnerable to terrorist threats. Ratcliffe also alleged Iranian interference in the 2020 election, accusing the regime of trying to “foment social unrest” in the U.S.

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