By Jamie Girard and Jay Chittooran, SEMI Public Policy
With much pride, President Donald Trump, in his State of the Union address last week, touted the signature legislative achievement of his first year in office – passage of the Tax Cuts and Jobs Act. As companies doing business globally, SEMI members have long stressed their concern that the US business tax code was putting them at a disadvantage. SEMI has worked for many years to voice its position that the US code needed to be reformed to lower the overall tax rate on businesses while also retaining incentives for innovation, like the research and development (R&D) and tax credits. SEMI also pushed for the US to move to a territorial tax system to bring the US into alignment with the rest of the world.
The Tax Cuts and Jobs Act implements all the of principle that SEMI members have advocated for, and included other industry priorities like repatriation of foreign held assets at a lower rate. The new structure promises to allow for a more competitive business environment for companies doing business from the US, and greater growth for them globally.
“As tax cuts create new jobs, let us invest in workforce development and job training,” Trump noted in his State of the Union speech, addressing another major industry priority. “Let us open great vocational schools so our future workers can learn a craft and realize their full potential.”
Workforce development (Talent) is a critical issue for the industry, and SEMI recognizes the pressing need on multiple fronts to find the workers, both technical and highly-educated, to continue the work of driving innovation in the semiconductor industry. While SEMI works with industry partners to boost the industry talent pool, we also recognize that the federal government has a role to play in ensuring that the US is doing its share to help address the problem. That’s why SEMI supports legislation like H.R. 4023, the Developing Tomorrow’s Engineering and Technical Workforce Act, aimed at providing federal dollars to promote engineering education at all levels of learning. The bill has bipartisan support in Congress, and SEMI will continue to work to see the bill travel to President Trump’s desk for his signature.
Facilitating trade and lowering barriers for good and services to move across borders is key to SEMI’s mission to support its members. The semiconductor industry has catalyzed growth across the global economy – growth that relies heavily on trade.
“America has also finally turned the page on decades of unfair trade deals that sacrificed our prosperity and shipped away our companies, our jobs, and our nation’s wealth,” Trump noted last Tuesday. “The era of economic surrender is over. From now on, we expect trading relationships to be fair and to be reciprocal. We will work to fix bad trade deals and negotiate new ones.”
Unfortunately, trade has been turned into a hot-button political issue, raising many new trade challenges to companies throughout the semiconductor industry. The Trump Administration has levied intense criticism of China, launched a number of trade investigations citing foreign overproduction, and has threatened to withdraw from the Korea-U.S. Free Trade Agreement (KORUS). The United States has also levied tariffs on a number of products, including solar cells. This is all on top of the North American Free Trade Agreement (NAFTA) modernization talks, which have seen slow and shallow progress.
While the United States “reexamines” and stands still, other countries are filling the leadership void. China, Canada, Korea, and the European Union, among others, are negotiating or have concluded trade deals in the last year. Indeed, the updated Trans-Pacific Partnership, which now excludes the US but covers many of the fastest-growing Asian markets, is on track to be enacted by the end of the year. SEMI will continue to work on behalf of its members around the globe to open up new markets and lessen the burden of regulations on cross-border trade and commerce.
Additionally, although President Trump devoted much his address to immigration, he overlooked the opportunity to address the need for immigration reform for high-skilled workers. This important aspect of the immigration debate, which also has major implications for economic growth, will fall to Congress to sort out in any immigration package it considers in the coming weeks.
Fortunately, Sen. Orrin Hatch (R-UT) recently reintroduced his Immigration Innovation Act, also known as “I-Squared,” which would implement a number of reforms to the H1-B visa and green card system for highly-skilled workers. The bill would raise the cap for H1-B visas from the current 65,000 to allow for as many as 190,000 in good economic times, while also lifting the cap on greed card holders with STEM degrees from US institutions. SEMI has long supported these efforts and will continue to work with policymakers to see reforms implemented to improve the system.
While partisanship in Washington remains high, SEMI continues to work on behalf of its members to advance crucial public policy matters for its members with policymakers in Washington, DC. In particular, SEMI focuses on how these issues impact the four 4T’s – Trade, Taxes, Technology and Talent. The path forward on many of these issues will be complicated by midterm election year politics, but the opportunity remains to see real positive changes enacted, even in such a challenging environment.
If you’d like more information on SEMI’s public policy work, or how you can be involved, please contact Jamie Girard at [email protected].