U.S. Commerce Secretary Gina Raimondo warned during a call with reporters on Friday that there will be no quick fix to resolve the semiconductor shortage contributing to supply chain disruptions causing a ripple effect across the economy.
"We didn't get in this mess overnight, and we're not going to get out overnight. This has been a problem decades in the making," she explained. "There has been a slow deterioration of our manufacturing base in America over decades, and we need to start now to rebuild."
Last week, the House of Representatives passed the America COMPETES Act of 2022, which aims to strengthen semiconductor chip production and make America more competitive with China.
The 2,900-page bill, which is similar to the U.S. Innovation and Competition Act passed by the Senate in June, includes $52 billion to support domestic semiconductor manufacturing and research, $45 billion to strengthen the supply chain, and $160 billion for scientific research and innovation.
"I'm urging Congress in the strongest possible terms to move quickly, immediately now to start negotiations and work out the differences between the House and Senate bills," Raimondo said. "Focus on areas of common agreement, find the landing zone, start negotiating and move as swiftly as possible to get a final version of the bill to President Biden's desk for his signature."
Raimondo acknowledged positive developments in recent weeks, such as a $20 billion investment from Intel for a semiconductor factory in Ohio, but emphasized that the supply chain remains "fragile" and that the $52 billion of funding in the COMPETES Act is crucial to resolving the chip shortage.
"Companies have told us that without this chip's funding, they will build these plants elsewhere," she stressed. "We need them to build these manufacturing facilities in the United States of America to create jobs here and shore up our national security."
According to Raimondo, demand for chips is running almost 20% higher than 2019 levels. She also noted that fabrication plants across the globe are running at their capacity and chip inventory has fallen from 40 days to less than five days.
"A COVID outbreak, a natural disaster, political instability, anywhere in any factory, anywhere in the world, disrupts our American supply chain and there are ripple effects all across the economy," she added. "This is affecting real families in America, all over America, and every day we delay, we fall further behind."
Republicans have argued that the COMPETES legislation in its current form has too many provisions that leave the U.S. vulnerable to China's malign activity.
Despite the criticism, Raimondo said that "huge portions" of the legislation have received bipartisan support and that the aid it will provide is too important to let politics get in the way. She anticipates the most contentious area in negotiations will be the trade title portion of the bill.
"While trade is, of course, an incredibly important part of our competition strategy, we have to find common ground, however, limited that might be, and not let those controversial pieces of the trade title bog down this whole negotiation," Raimondo said. "This is about investing in America, so we can lead on our front foot and run faster and lead the world in technology. And that's what we have to stay focused on and not dawdle."
Fox Business' Marissa Schultz contributed to this report