ABSTRACT
The difficulties encountered by the US microelectronics industry in the mid-1980s have generated a lively debate over what should be done by the US Government to address the problem. A number of the US government policy measures which affect US competitiveness in microelectronics have been implemented in response to US industry initiatives, and such industry-driven policy actions may offer the best model for future industry-govemment cooperation. The most visible and dramatic actions taken by the US Government in the semiconductor field have been in the trade arena, where intervention has been required to prevent the outright destruction of some segments of the US industry. An effective trade policy can ensure that the US microelectronics industry is not destroyed by dumping, and it can maximize US market opportunities in other countries. In general, tax policies should be designed to put US firms on an equal footing with their foreign competitors with respect to research and development and capital investment.
