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The Wall, Political Gridlock and China: SEMI's Take on SOTU Address

For public policy lovers, civic-minded, engaged U.S. citizens, and people around the world interested in the U.S. President’s positions and priorities, the annual State of the Union address (SOTU) is “must-see TV.” This year, the anticipation and expectations were different than with past presidents. President Trump is the first U.S. president who has used social media to the extreme that he has. 

President Trump’s prolific Twitter feed has had an interesting impact on the SOTU. U.S. citizens and people from around the world already know President Trump’s positions on issues, his policy priorities and what gets him excited. There is an ongoing, direct line to the President’s thoughts throughout each and every day. In the past we looked to the SOTU for insights into what the sitting president is really thinking and his future policy priorities. Now, there isn’t much we don’t already know.

One looming question this year was whether President Trump would reach out in a conciliatory manner to help bridge the political divide and lay the groundwork to enable some public policy wins and avoid another government shutdown. While there were moments of conciliation, the President made it clear he would not move on areas that are most contentious with the other side of the aisle. 

SOTU wallFor example, the President unequivocally reiterated his intent to build the wall. While the message plays well to his base, it is, in effect, a frontal assault and challenge to Democrats. It’s hard to image that his staunch stance will help move the two parties to work together on substantive policy issues. It may also mean that the wall issue will occupy lawmakers time for the foreseeable future, sidelining debate on other important issues.

The best hope is that a bipartisan bill finds its way to the President’s desk that he can sign and use to “declare victory.” However, many political observers believe the likelihood of the President declaring a national security emergency is rising as a maneuver to ensure funding for the wall and avoid a shutdown. While such a declaration would most likely face a court challenge, the President could claim that his decision was a move of last resort and leverage the moment to position Democrats as obstructionists to his base. The scenario does not bode well for the bipartisan support necessary to address other issues.

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What does this mean for our industry? Were there any points raised in the SOTU that would signal a change in what we are facing regarding trade, tariffs, export controls and immigration? Were any new issues or ideas raised that could help lift the global economy? In short, no. On one hand, the President cited his good relationship with the president of China, but on the other doubled down on his attacks on China, seeming to stand firm to bolster his position at the table as the U.S. and China trade talks continue.

SOTU DCWhat do these dynamics mean for SEMI Global Advocacy? In 2018 we were heavily engaged in efforts to prevent regulations that would inhibit our members' ability to develop and deploy technologies and maintain global market access. We advanced our global advocacy model, leveraging our regional presence around the world. Many of the potential issues we faced emanated from the U.S., including those focused on controlling technology development, limiting trade and enhancing export controls. We also intensified our efforts to address industry talent pipeline issues.

In 2019, our public policy focus will be to continue to push back on tariffs, engage members to inform the rule-making process for export controls and to attempt to influence the immigration debate as it pertains to access to talent. In addition, while the U.S. R&D tax credit was made permanent through the tax cut in 2017, some of the provisions may have unintended consequences and will need to be modified. How the law is enacted will affect how businesses can deduct qualified research and development and other expenses from their taxable income, so we anticipate activity on the tax front as well.

SOTU WFDIt will also be a big year for SEMI on the workforce development front. SEMI will continue to grow its existing High Tech U (HTU), university and mentor programs. In addition, SEMI will be positioning itself as the global leader in addressing issues related to the talent pipeline by approaching the problem with a full-spectrum, holistic approach that is intended to better address more immediate needs in attracting, training and retaining qualified talent. We’ll also focus on improving the industry image and exciting students at a younger age by providing experiential learning activities throughout a defined educational pathway. Stay tuned on this front as the full program unfolds.

In general, we will continue to build our relationships and stature as a leading voice for our members and the end-to-end semiconductor supply chain in the areas of talent, trade, tax and technology (SEMI’s “4 Ts”) and to ensure free and fair trade, access to markets, supply chain growth, IP protections and enhanced efforts to improve cybersecurity. 

Mike Russo is VP of Global Industry Advocacy at SEMI.  

Topics: Tax , China , Workforce Development , Trade , Industry Advocacy , Public Policy , semiconductor industry , talent , semiconductors , Trump , technology , State of the Union , talent pipeline , government shutdown , SOTU , Twitter

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