By David Shepardson

WASHINGTON, (Reuters) – The United States’ largest labor union said Monday that it wanted lawmakers to negotiate a funding increase for the production of semiconductor chips and to improve American competitiveness. It also asked them to eliminate “pro-China” provisions.

In a letter addressed to legislators, the AFL-CIO trade union, which represents 12.5 million workers in China, criticized the Senate bill. It stated that it would benefit China’s economy by lower tariffs, and continue our dependence on China in key areas.

Separate versions of the bill were passed by the Senate and House of Representatives. Now, they are negotiating for a final agreement. The AFL-CIO supports both versions, with $52 billion being allocated to support U.S. production and research in semiconductors.

The industry’s persistent shortage of chips in electronics and automobile has forced some companies to cut back on production. There have also been increasing calls for a reduction in dependence on foreign countries for semiconductors.

AFL-CIO demands the elimination of many trade provisions from the Senate version. This includes reforming a tariff exemption process and giving tariff-free access to Chinese personal protective equipment and medicines.

Representatives from the Senate and House met to start negotiations on Thursday. But, it is possible that it will take several months for any final agreement.

Gina Raimondo (Commerce Secretary) stated that China opposes the expansion of U.S. manufacturing semiconductors because it will give the United States a stronger competitive edge.

U.S Chamber of Commerce supports the Senate’s trade provisions. This includes its tariff exclusion procedure reforms and reinstating expired tariff exclusions. It demanded that the House version be rejected because it contained “misleading and problematic provisions”.

The former President Donald Trump’s administration imposed Section 301 tariffs on $370 billion worth of Chinese imports annually. Some tariff exclusions were reinstated by the Biden administration in March.

AFL-CIO stated that the Senate bill “would unnecessarily bind the administration with respect to China 301 tariffs, and weaken U.S. Enforcement of Trade Laws necessary to stop China’s illegal trade practices.”