According to Politico’s Thursday report, US Senate Majority Leader Chuck Schumer and Republican Senator John Cornyn are actively advocating for a prohibition on government transactions with Chinese chip manufacturers. Citing three sources familiar with the matter, the senators are pushing for their amendment, which aims to prevent federal access to semiconductor products and services produced by Chinese firms, to be included in the final version of this year’s National Defense Authorization Act (NDAA).

The proposed measure seeks to expand the existing provisions in Section 889, which currently prevent government agencies from engaging in business with Chinese telecommunications companies or contractors utilizing their technologies, as per Politico’s report. Schumer and Cornyn successfully added their proposal to the Senate NDAA last month through the October managers’ package and are now engaged in efforts to persuade their fellow senators, the report further noted.

The fiscal 2023 NDAA requires approval from both the Senate and the House of Representatives later this year before reaching the White House for President Joe Biden’s signature into law. Last month, the Biden administration unveiled comprehensive export controls, including a provision to restrict China’s access to specific semiconductor chips manufactured worldwide with US tools.

On August 9, President Biden signed a significant bill allocating $52.7 billion (approximately Rs. 430 crore) in subsidies for US semiconductor production and research, aiming to enhance competitiveness against China’s science and technology initiatives. While Biden highlighted chip companies’ investments, the timeline for the US Commerce Department to establish rules for reviewing grant awards and the duration for project underwriting remains uncertain.

The legislation authorizes $200 billion (roughly Rs. 16,34,700 crore) over a decade to boost US scientific research for improved competition with China. Separate appropriations legislation would still be required from Congress to fund these investments.