US Commerce Secretary Howard Lutnick said in a CNBC Squawk Box interview on the 26th that one of his first actions after taking office was to call TSMC chairman and CEO C.C. Wei. Lutnick argued that the Biden administration's US$6.5 billion federal subsidy to TSMC was "absurd," stressing that under the Trump administration, the US intends to claw back the grant.
Lutnick maintained that the US government must extract real benefits from subsidy arrangements, criticizing the Biden White House for being too lenient. He said support under the Biden-era CHIPS and Science Act amounted to corporate handouts, whereas Trump's administration would ensure the American public got something tangible in return.
TSMC and US investment pressure
According to CNBC, Lutnick suggested that TSMC must commit greater investment in the US. Wei subsequently visited the White House to announce plans for US$165 billion in spending in the country. Lutnick emphasized that such commitments are necessary to guarantee Americans benefit from the deal.
He framed this as part of Trump's tougher stance: subsidies should not come "for free," but must be tied to equity stakes, expanded investment, or other returns.
Micron, TI, and the 'bargain' model
Lutnick highlighted examples of companies pressured to scale up commitments. Micron, which initially received a US$2.5 billion federal grant for a US$25 billion fab, later boosted its investment pledge to US$200 billion. Texas Instruments expanded its US investment plan from US$23 billion to US$60 billion.
Intel was another key case. Lutnick said the Biden administration gave Intel US$11 billion in grants with little in return, calling it corporate welfare. By contrast, Trump personally sat down with Intel CEO Lip-Bu Tan to renegotiate, ultimately securing a 10% government equity stake in Intel — equivalent to the same US$11 billion subsidy.
Beyond subsidies: equity, rare earths, and defense
Lutnick reiterated that government backing should never be giveaways. He argued that if Washington provides critical support — whether through subsidies, tariff protections, or strategic approvals — then taxpayers deserve a stake.
He extended this principle to other sectors, questioning why universities keep patents funded by federal research grants, and raising the case of defense contractors like Lockheed Martin, which derive nearly all revenue from the US government.
On strategic resources, he pointed to rare earths as an area where the US must intervene. With China controlling over 90% of the market and choking supply, Lutnick said such industries "don't work unless the United States gets behind them," underscoring Trump's approach to secure critical supply chains.
No sovereign wealth fund, but a national security fund
Responding to speculation, Lutnick clarified that the US is not creating a sovereign wealth fund. Instead, he outlined plans for a national and economic security fund, backed not by American taxpayer dollars but by contributions from allies including Japan and South Korea.
These funds, he said, would help finance infrastructure and strategic projects in the US, deals Trump forged using tariff leverage.
Article edited by Jack Wu
