In coming years, the pace of technological innovation and deployment will only quicken. The new administration will need a systematic and sustained approach.
On January 20, Donald J. Trump entered office as our nation’s forty-seventh chief executive. With his electoral mandate for bold change, the opportunities are boundless. Following recent decades of costly foreign entanglements—from our abusive relationship with the Chinese Communist Party (CCP) to our disastrous military engagement in Iraq—most Americans are understandably eager for change. They want President Trump to press forward with his campaign promises to avoid unpopular foreign commitments, insist that allied countries stop “free riding” off of the United States, supercharge America’s manufacturing might, and ensure that the world plays by America’s rules, not China’s.
Meanwhile, tech power—AI, biotech, quantum, drones, and more—is fundamentally transforming our economy, security, and the very nature of global power. The Trump administration can seize on the intersection of the president’s promises and the opportunities for peace, freedom, and prosperity that the dynamic technological revolution presents.
President Trump wisely selected a Vice President who understands tech power and how it is fundamentally transforming our economy and security. JD Vance is familiar with Silicon Valley and has strong relationships with prominent tech luminaries like Elon Musk and Peter Thiel. Just days after the election, Trump also appointed a White House AI and Crypto Czar to spearhead federal policy and nominated tech strategist Jacob Helberg to lead the economic portfolio at the State Department.
These moves have positioned the administration to ensure Washington develops and executes a winning tech power playbook within a broader national economic security strategy. While the first Trump administration made many important contributions to enhancing America’s tech power, in coming years, the pace of innovation and deployment will only quicken. Accordingly, a systematic and sustained approach will be needed.
Within these four short years, America and our friends could—and should—realize not only more resilient supply chains but also improvements in our productive capacity and military overmatch relative to China and its malign partners: Russia, Iran, and North Korea.
President Trump is right to insist our friends help shoulder burdens if they wish to enjoy benefits. One can imagine a new multilateral network of tech-allied nations, which shares responsibilities such as capital investment, mobilizing and sharing technical expertise, building supply chain redundancies, defending against efforts to undermine our free and open internet, and more. Several years ago, Senator Mark Warner (D-VA) and I argued for this approach through the creation of a formalized collection of democratic technology allies, akin to the G7, to lead on standards and development. I would encourage Secretary of State Marco Rubio to pursue this course.
But how might we also ensure that all who share in the blessings of new technologies are joining us to enable a new tech ecosystem that adheres to Western rules, values, and interests, not those of our autocratic adversaries?
As the Trump administration considers how it might activate and deepen tech cooperation internationally, it might consult a key chapter in the U.S.-led international tech collaboration playbook of the previous four years: the CHIPS and Science Act.
The law, which I helped author in the Senate, was itself the product of conversations that began during the first Trump administration. And while it is often referred to as a domestic economic policy initiative, the CHIPS and Science Act is a critical national security effort as well. Indeed, it has led to some of the largest commercial and diplomatic breakthroughs in a generation, and its elements might serve as the first draft of a tech power playbook for the new Trump administration.
A Strong Offense: Unlocking Manufacturing And Innovation
One essential element of America’s tech power playbook is a strong offense, including domestic semiconductor production.
A frequent source of frustration within our national security community—and among advocates of distributing economic opportunity more broadly across the nation—is how great American companies have grown accustomed to designing sophisticated products but then outsourcing all manufacturing to heavily subsidized Asian markets. The CHIPS Act is showing that it doesn’t have to be that way.
Consider recent activity in the Midwest, a historical epicenter of America’s defense industrial base, which also happens to be Trump country. In April 2024, SK Hynix announced a $3.8 billion advanced semiconductor packaging and R&D investment in the Purdue University research park, just off the university’s campus in West Lafayette, Indiana. The investment fills a critical gap in our defense manufacturing base. Still, it did not materialize in a vacuum. The university and the State of Indiana made strong offers of support in a competitive bidding process—with the process backed by a $39 billion congressional appropriation under the CHIPS Act to bring chip manufacturing commitments to the United States.
This investment is just one example of many. At the time of this publication, more than $450 billion in foreign and domestic private-sector semiconductor investments have been announced in just over two years since the law took effect.
We should remember that these critical investments did not occur in a vacuum. Indeed, today’s microchip revolution was initially sparked by decades of federal funding of microelectronics research. The United States should make similar investments now in other critical and emerging technologies to avoid the need for emergency measures like the CHIPS Act in the future. Going on offense entails working with America’s private sector to unlock innovation domestically, and the federal government has a longstanding track record of making targeted investments that stimulate massive entrepreneurial activity, from the Space Race to the development of the internet. However, public R&D remains static in critical fields, including AI, advanced manufacturing, advanced energy, quantum computing, and biotechnology.
Robust and sustained science funding is needed to support future technology advancements. While the CHIPS and Science Act appropriated over $52 billion for semiconductors, Congress only authorized but did not fund the “Science” part of the bill, leaving it subject to the annual appropriations process. President Trump and his team have an opportunity to take the lead in funding fundamental and transformational science and driving more innovations to market.
Meanwhile, China will continue to rapidly increase its investment in research and development (R&D). Since 2000, China’s public spending on R&D has grown sixteen-fold, placing it second in the world behind the United States for total spending. If America fails to meet the moment by accelerating strategic investments in scientific research for future technologies, we risk ceding our global leadership, imperiling our national security, and stymieing President Trump’s “Golden Age” of innovation.
And, in the absence of federal support for science and technology, multilateral efforts to constrain the advances of our peer adversaries will become even more important.
Strong Defense: Tech Controls
From the beginning, the economic and national security game plan of the CHIPS Act necessitated pairing a strong offense of manufacturing investments with a strong defense of intensified multilateral efforts to prevent the delivery of advanced chips to foreign adversaries. This will be all the more important with unfolding advancements in artificial intelligence.
Hence, we adopted measures in recent years to improve the tracking and restrict the flow of chips and manufacturing equipment to foreign adversaries, like the CCP. Countries with sufficient access to the most advanced chips will be able to conduct research and field leading-edge AI models with significant implications for America’s national security.
Crucially, the Department of Commerce also placed restrictions on U.S. persons traveling to China to support developments or construction projects within their indigenous semiconductor sector. Going forward, the United States must be transparent with partners and allies who have joined us in this effort. There are unavoidable costs associated with this strategy, but to facilitate net wins for our tech partners, they can be managed when we prioritize active and regular engagement to keep friends informed and on board.
With an urgent need to control the AI supercomputing capabilities of our primary pacing challenger, it is easy to see how the assembly of a multilateral controls regime has armed our government with a muscle memory the Trump administration could extend to controlling the proliferation of a number of dual-use technologies—from telecommunications to unmanned systems to biotechnology applications. The Commerce Department, soon to be led by Howard Lutnick, can put forward a balanced strategy of targeted tariffs and sanctions that complement a robust export control regime to ensure America maintains technological leadership.
As domestic investments meet export restrictions, growth in the U.S. market catalyzed by the CHIPS Act will help offset restrictions on selling into the Chinese market. Growth in the American share of the global semiconductor industry increases our ability to secure the best possible deals for domestic manufacturers.
In order to capitalize on emerging technology opportunities, the United States should also take advantage of an important new player central to the CHIPS playbook: a formalized program of technology diplomacy empowered to extend across administrations.
Special Teams: The New Diplomats
Every day, the men and women of America’s diplomatic team fight for America’s commercial and national security interests. In recent years, those interests have been occasionally subordinated to divisive social and climate agendas, undermining faith in America’s diplomatic enterprise and leaving politicians questioning whether core diplomatic priorities are still front of mind.
As the Trump administration considers how it might win over State Department critics and what high-value areas its diplomats should emphasize, it might consider how it can build on existing tech diplomacy efforts.
As part of the CHIPS Act, Congress created the International Technology Security and Innovation (ITSI) Fund. This $500 million fund can be used by the Department of State, U.S. Agency for International Development, Export-Import Bank, and International Development Finance Corporation for supply chain activities related to IT, communications technology, and semiconductors.
Currently, multiple State Department bureaus utilize ITSI to develop new pathways for semiconductor manufacturers to access critical supply chains and identify both upstream and downstream opportunities for American and allied businesses to meet the needs of our people. In just over two years, America’s diplomatic corps has helped integrate American and host country supply chains at every level of production—from critical minerals sourcing and processing challenges to the assembly, test, and packaging portion of the semiconductor economy—and helped businesses overcome related workforce or regulatory barriers.
State’s ITSI teams are also integrated into the workstreams of the CHIPS Program Office (CPO) at the Department of Commerce—the office that oversees the awarding of the CHIPS Act’s incentive program. When CPO enters into preliminary conversations with applicants seeking CHIPS manufacturing incentives, the ITSI teams also begin to work with them to better understand what upstream and downstream constraints they face, or may face, if they ultimately receive an award from CPO.
Despite its modest cost, ITSI is a lynchpin to the success of the entire chips effort. With CPO awards as the hub, ITSI projects serve as the spokes, connecting the growing American semiconductor industry to the rest of the world in a way that enables the United States to enhance our economic security across key nodes of vulnerability while being sensitive to proven free market concepts of comparative advantage. The results are indicative of ITSI’s success. For example, the United States and the Vietnamese government entered into a multi-million dollar agreement with an American university to promote talent development and policies to incentivize mutually beneficial downstream projects in assembly, testing, and packaging. In Central America, the State Department is working with the governments of Panama, Costa Rica, and Mexico to examine and create action plans for these economies to support complementary semiconductor ecosystems that span and stand to benefit the entire Western Hemisphere.
State Department diplomats are maximizing ITSI to further the development and growth goals of the United States but also to sustain a multilateral semiconductor economy that is more proliferated, more robust, and more resilient. Critically, these partners are turning to the United States, not China, as they develop integrated technology supply chains with associated market relationships, interdependencies, and free and open tech standards.
The Gameplan: Examining the Future
How should the commercial and diplomatic activities spawned by the CHIPS and Science Act inform a more comprehensive tech power playbook to outcompete China?
First, Congress should act swiftly to fully fund the authorities of the “and Science” portion of the bill. In order to out-compete and out-innovate our competitors, we must present a more compelling option to the world through better, more affordable technology products and services that are produced at scale. Our private sector and our capital markets are the best in the world, but they are not optimized for the types of investments needed, especially as the CCP increasingly puts its thumb on the scale in support. Through the strategic investments of the entire CHIPS and Science Act, we can provide the positive spark that helps more innovators commercialize their research and present options to the world that are not tainted by the authoritarian designs of the CCP.
Second, the Trump administration should extend the recent successes in semiconductor diplomacy to other emerging technologies in order to promote openness, democracy, and the rule of law. China, through its programs of economic espionage and domestic investments in science and technology, offers the world a subsidized, government-controlled, techno-authoritarian alternative. It is clear that the CCP aims to catch the United States asleep or adrift, occupy the “commanding heights” of today’s economy, and launch a modern-day “people’s revolution” in military and technological affairs.
Secretary Rubio understands this dynamic, and the State Department can help prepare the West to compete by having our cadres of tech-savvy diplomats—in appropriate partnership with tech innovators—spread out across the globe to establish trusted global standards for technology security and interoperability. By doing this, they can help map out supply chains to understand vulnerabilities to economic coercion or exogenous shocks.
In recent years, the department has prioritized placing trained officers at embassies around the globe to lead the technology portfolio. There is now an opportunity to build on this, and in conjunction with a necessary review of the department’s organization and core functions, consider where the department can be reorganized to ensure that American foreign policy is predicated on a recognition that science and technology are foundational sources of American power.
Third, the Trump administration should use ITSI as the entry point to increase awareness of embassies and consulates of global science and technology challenges and opportunities. We need a diplomatic corps that is as comfortable discussing critical and emerging technologies and negotiating tech standards as it is discussing development programs or status of forces agreements.
The State Department should prioritize technology training and embedded fellowship opportunities for officers and staff within the Foreign Service and Civil Service to enhance understanding of the opportunities presented by technology and what is at stake if American technological leadership erodes. We should also prioritize a positive, transparent role for the United Nations in setting liberal, democratic standards for the use of emerging technologies. If given the green light, I am confident Elise Stefanik, President Trump’s pick to be ambassador to the UN, will rise to this task.
Fourth, the Trump administration should build on the success of the digital trade chapter of the 2018 United States-Mexico-Canada trade agreement (USMCA) and its landmark 2019 U.S.-Japan Digital Trade Agreement to make digital trade a core pillar of future trade negotiations. Nominated U.S. Trade Representative Jamieson Greer should strike new free trade agreements to provide downstream and upstream support for America’s technology sector, including in semiconductors.
I recently argued to our Canadian and Mexican partners that USMCA, which is eligible for review in 2025, should be revitalized to ensure that technology supply chains are placed at the same level of openness as automobiles and agricultural products. More ambitiously, in partnership with champions in Congress, the Trump administration should immediately begin reviews to potentially expand USMCA to encourage high-tech trade at the upper ends of the value chain.
Fifth, Mr. Lutnick might complement USTR’s work by targeting non-tariff barriers to U.S. digital trade. He could take a page out of former Commerce Secretary Herbert Hoover’s playbook by requiring NIST to prioritize international standards setting. Harmonizing standards and ensuring they meet American values will facilitate foreign market access for tech firms and enhance U.S. tech power abroad.
In concert with this effort, the White House should consider ways to present a better option to a world demanding technology solutions by harnessing the power and capacity of America’s technology sector. This could be a formalized program for exporting U.S. technology solutions in computing, AI, or biotechnology with certain incentives and expectations attached, similar to how we approach the export of defense articles through the Foreign Military Sales (FMS) process. An America First technology strategy must not just talk about the challenges presented by China but instead, offer tangible solutions that accrue benefits to America’s economy.
Sixth, the Trump administration might examine how Americans can take better advantage of our world-class capital markets in tandem with regional development banks, like the Inter-American Development Bank, to provide financing and technical assistance for governments and businesses seeking to contribute to supply chains for semiconductors and other emerging technology sectors. Could the United States, for example, develop a consortium of private capital leaders to join with a semiconductor company to rapidly develop a network of assembly, testing, and packaging facilities across Central and South America? This could help de-risk our supply chain while allowing developing economies to continue to move up the value chain.
Seventh, as funding for the ITSI program ends in 2027, Congress should consider reauthorizing and expanding the bipartisan program to tackle a broader set of challenges. The hard-earned expertise that our diplomats and private sector partners have developed can be brought to bear to deepen America’s collaboration and should inform any such expansion.
Eighth, the Trump administration should encourage carefully scoped efforts to pair American AI with foreign capital to bring trusted AI solutions to the developing world. An example of this model is Microsoft’s recent partnership with UAE-based AI firm G42 to invest $1 billion in a data center in Kenya to help expand cloud-computing services in East Africa.
Lastly, and crucially, America must keep working with like-minded allies and partners while utilizing commercial and trade advantages wherever possible to develop a liberal, democratic market for technology that reinforces our values—privacy, transparency, safety, property rights, freedom of speech, and religion. With these standards at the forefront and using the power of strong cross-border agreements on digital trade, we should present a high barrier to entry for technologies—whether AI, biotech, telecommunications, or any other foundational capability—from countries of concern.
If a Chinese technology company wishes to sell into the multi-national tech-allied market, they must adopt our standards. Over a period of years, through our enormous combined market share, we can make it economically impossible for the export-oriented economies of our adversaries to sustain a bifurcated market for technologies—free versus unfree markets. As President Ronald Reagan once put it: “We win, they lose.”
While ambitious, this is just a start. The future of American power will be determined by our ability to innovate and sustain a highly developed workforce prepared for the economic challenges and opportunities this century will reveal. Technology is inextricably linked to this vision, and American leadership can stand against the strong tide of techno-autocratic encroachment from the CCP.
As the Trump administration takes shape, it would do well to study the CHIPS and Science tech power playbook to harness our diplomatic prowess and tools to benefit our preferred approach to technologies of the future, including sharing international burdens and benefits. If America leads smartly to strengthen our industrial base and enhance our economic resilience, our allies and partners will follow, and our adversaries will quake. The promise of America First will be fulfilled.
Todd Young is the senior U.S. senator representing the state of Indiana and a member of the Senate Committee on Science, Commerce, and Transportation. Follow him on X: @SenToddYoung.