The US would face a 'deep and immediate recession' if made-in-Taiwan chips were cut off, US commerce secretary says

If the country's access to made-in-Taiwan chips were cut off, the US would face a deep and immediate recession.

Raimondo told CNBC's Sara Eisen that it's a scary scenario if the United States no longer had access to the chips being made in Taiwan. There is an immediate recession. Making military equipment is not enough to protect us. This needs to be made in America.

The Senate voted 64-34 on Tuesday to advance a $50 billion bill that would boost US manufacturing of chips.

"We need a manufacturing base that produces these chips, at least enough of these chips, here on our shores because otherwise we'll just be too dependent on other countries," she said.

The US buys most of its leading-edge chips from Taiwan, where they are made. Such chips are used in a wide range of applications and pose a national security risk.

Raimondo said that you can't have any innovation without chips. Every other innovation-based industry relies on transistors.

The Taiwan Semiconductor Manufacturing Company is the world's largest manufacturer of chips.

China has not ruled out using military force to "reunify" with Taiwan, which poses a risk to US national security.

In May, President Joe Biden said that the US would defend Taiwan if China attacked it. A White House official later said Biden's comments were in line with the US policy on China.

The US is at risk of a recession because of high inflation and the Federal Reserve's interest rate hikes, which make it more expensive to buy big-ticket items.