Republicans are warning that their ability to deliver on lowering everyday costs, one of their core campaign promises heading into the 2026 midterms, is being tested by an AI-driven chip shortage that has spilled into consumer markets.

«When you have a big race like we have with AI, there are secondary effects that we need to be very concerned about,» former Rep. Patrick McHenry, who served as House Financial Services Committee chairman, told Fox News Digital, adding, «It is hurting Republicans.»

Tech industry reports have for months been raising alarm over a global chip shortage. In January, a report predicted that this year, 70% of the high-end memory chips produced would go toward data centers, which store AI memory, constraining all other downstream technology and driving up prices, directly undermining Republicans’ affordability agenda.

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«We see this from our handheld devices to our computers, to TVs,» McHenry, a North Carolina Republican congressman turned policy advisor, said in an interview. «Even autos are impacted, and even things such as what we think of as average everyday things that aren’t particularly high-tech, like the things we use to manicure our lawns are impacted by rising prices of chips, so there’s a lot of secondary effects across consumer goods and should be a huge concern.»

Heading into 2026, President Donald Trump framed the midterms as a referendum on cost of living, saying in a Politico interview the elections «will be about pricing.» 

Historically, the party in control loses seats during the midterms. One Republican strategist told Fox News Digital that AI’s well-documented dominance over the chip market should be viewed as hurting voters’ pocketbooks. The strategist called on the three largest chip manufacturing companies to expand production, which he said would help bolster the GOP’s campaign message.

«America must win the artificial intelligence race. Companies like Samsung, SK Hynix and Micron understand that,» the strategist said. «At the same time, we can’t forget about consumer goods. Memory chip manufacturers need to increase production to boost both American AI and lower the cost of consumer goods. If they don’t, it will undoubtedly hurt Republicans politically in the midterms. How can Republicans campaign on ‘lower costs’ in 2024, but see computer and car prices rise in 2026 due to a lack of chip production?»

TRUMP TORCHES DEMS’ ‘FAKE AFFORDABILITY’ PITCH – BUT GOP PANIC IN DEEP RED STATE HINTS VOTERS AREN’T BUYING IT

The OpenAI logo appears on a mobile phone in front of a computer screen displaying ChatGPT output in Boston on March 21, 2023. (Michael Dwyer/AP)

The AI boom is increasing demand for memory chips, which are semiconductor components used in data centers, laptops and smartphones.

That chip consumption has rippled across industries. Microsoft this month attributed its rise in laptop prices to «recent increases in memory and component costs.» The smartphone market remained «under pressure,» with shipments down 6% this year, largely because of chip shortages, Counterpoint Research found. 

Sen. Bernie Moreno, R-Ohio, previously a car dealership owner, warned in a letter this month his state was seeing «immediate and severe» consequences of rising chip prices and that automakers have said they could begin halting assembly lines as early as next month.

While affordability has been a resounding priority for Republicans seeking to retain control in Washington, AI advancements are also a pillar of Trump’s agenda. The White House declared last year in a sweeping plan that the country was in «a race to achieve global dominance in artificial intelligence» and cited the need for a «revitalized U.S. chip industry.»

Asked about the AI-driven affordability concerns, White House spokesman Kush Desai told Fox News Digital in a statement that the White House was cognizant of the clash and balancing it with a «nuanced» economic plan, which includes Trump’s signature worldwide tariffs, which the president restructured after the Supreme Court struck down his initial plan implementing them in the name of what he said was a global economic emergency.

«The fact that semiconductor chips are absolutely critical for everything from cutting-edge AI technology to everyday consumer goods only reinforces the importance of President Trump’s push to reinvigorate America’s semiconductor industry,» Desai said. «Hundreds of billions in semiconductor manufacturing investments reflect how the private sector is enthusiastically responding to the Administration’s nuanced and multi-faceted agenda of tariffs, deregulation and tax cuts.»

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President Joe Biden speaks during a signing ceremony for the CHIPS and Science Act of 2022 on the South Lawn of the White House in Washington, D.C., on Aug. 9, 2022. (Saul Loeb/AFP)

The strain on supply is also raising new questions about the effectiveness of the bipartisan CHIPS Act, a Biden administration bill designed to boost domestic production and prevent precisely the kind of shortage markets are now seeing.

McHenry, who specializes in fintech policy, said the CHIPS Act, a multibillion-dollar effort to pour federal subsidies and tax incentives into U.S. chip manufacturing, has been a «grave disappointment.» McHenry said both that the White House had «a lot more work» to do to address the supply shortage and that congressional reforms were another way to improve domestic chip production.

«Unfortunately for the taxpayer, they paid for the CHIPS Act the first time, and now they’re paying for it a second time with the rising price of consumer goods,» McHenry said. «Republicans need to address this on Capitol Hill. They need to clean up the CHIPS Act, so the president can deploy these tools to incentivize and grow chip manufacturing here in the United States.»

Rep. Darrell Issa, R-Calif., who founded a successful car security company, said he sees a need for chip production expansion, tying it to consumer costs, in a statement to Fox News Digital.

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«America leads the world in AI — and we stay there by unleashing the nation’s industrial base, ramping up chip production and memory as never before and lowering the consumer costs people pay every day,» he said.

The congressman said more chips were «essential» to delivering on the GOP’s promises of «opportunity, prosperity and affordability.»

Fox News Digital reached out to representatives of Samsung, SK Hynix and Micron for comment.

After two months of conflict, neither a deadly bombing campaign nor a blockade on Iranian exports has forced Tehran to make the concessions the Trump administration is seeking.

The campaign has intensified in recent weeks, targeting Iran’s oil exports and financial networks while a naval blockade has disrupted shipments through the Strait of Hormuz, a critical artery for global energy flows. U.S. officials argue the combination of military pressure and economic isolation is intended to weaken Iran’s capabilities and force it back to the negotiating table on more favorable terms.

While the U.S. has killed Iran’s Supreme Leader Ali Khamenei and dozens of top military and political figures, the regime itself remains intact. His son, Mojtaba Khamenei, was selected to succeed him, and leadership remains firmly hardline.

Aaron David Miller, a former State Department Middle East negotiator and fellow at the Carnegie Endowment, said the administration may have misjudged the type of negotiating partner it would face.

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«Trump was looking for an Iranian Delcy Rodriguez,» he told Fox News Digital. «More likely, he’s going to end up with an Iranian Kim Jong Un.»

He expressed doubt that any decisive victory was possible while the current Iranian regime remained in power.

«And we do not have the capacity to remove the regime.»

The standoff increasingly has become a test of whether U.S. pressure can be converted into political concessions — or whether it is instead being diluted through workarounds, institutional resilience and competing constraints.

So far, analysts say, Iran has proven more capable of absorbing and rerouting pressure than Washington has been able to translate it into durable gains.

On Monday, Iran floated a proposal to reopen the Strait of Hormuz in exchange for relief from the blockade, while deferring negotiations on more contentious issues.

But analysts caution that such proposals do not address the core dispute and may not even mean the same thing to both sides.

«What the Iranians mean by opening the straits, and what Trump means, may be two different sorts of things,» Miller said.

At the center of the standoff is Iran’s nuclear program, where the gap between the two sides remains wide. The Trump administration has pushed for Iran to eliminate its uranium enrichment capability entirely, while Iran insists that enrichment is a sovereign right and non-negotiable — leaving little room for compromise.

CENTCOM shared footage of strikes against airplanes amid Iran war (U.S. Central Command on X)

That divide continues to block a broader agreement, even as both sides explore more limited steps to reduce immediate tensions.

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«It’s almost unimaginable that this administration and the Iranian leadership are willing to make the kinds of concessions that would allow this administration to walk away with a win,» Miller said.

«Iranians are willing to give concessions, but Trump is looking for capitulation,» said Trita Parsi, executive vice president of the Quincy Institute for Responsible Statecraft think tank. «And you can’t get a country to capitulate unless you have defeated them.»

Instead of folding under pressure, Iran largely has responded by adapting. 

Despite the blockade, Iran has continued to move at least some oil through workaround methods, including sanctioned vessels, smaller ports and alternative routing strategies, even as overall exports have come under strain.

Those efforts have expanded in recent weeks. Reports indicate Iran is exploring overland shipments, including potential rail exports to China, while vessels have increasingly rerouted through Iranian territorial waters or controlled shipping corridors to bypass restrictions.

«The United States successfully closes off one avenue for them, and slowly but surely they are finding workarounds,» Parsi said.

The financial impact of the campaign has been significant, even if uneven. Estimates vary, but some analysts put Iran’s potential losses from the blockade at roughly $400 million per day, largely driven by disrupted oil exports and reduced access to hard currency.

At the same time, Iran has not been fully cut off. The country has continued to generate billions in oil revenue in recent months, underscoring both the scale of the pressure and its limits.

While a sustained drop in oil revenue would strain the government’s official budget and force cuts to public spending, the country’s most powerful institution, the Islamic Revolutionary Guard Corps, operates through its own economic networks, including smuggling routes and cross-border trade.

That allows key parts of the regime to continue functioning even under heavy sanctions, meaning economic pain often falls unevenly — hitting civilians before it weakens the state’s coercive apparatus.

«Trump was looking for an Iranian Delcy Rodriguez. More likely, he’s going to end up with an Iranian Kim Jong Un.» (Julia Demaree Nikhinson/The Associated Press )

Even attempts to directly destabilize Iran’s leadership have not fundamentally altered that dynamic. U.S. and Israeli operations earlier in the conflict killed Khamenei along with dozens of senior military and political figures.

Yet the regime has remained intact, with power consolidating among remaining political and security elites aligned with hardline positions.

How long Iran can sustain that posture remains uncertain. Miller said a prolonged blockade could eventually force a breaking point — but only if Washington is willing to maintain it.

«If the administration is prepared for six months to keep up this blockade, I think they could probably break the Iranian economy,» Miller said.

But he cautioned that such timelines are difficult to predict and that even U.S. intelligence lacks a clear picture of when economic pressure might translate into political concessions.

That uncertainty raises a broader question about the sustainability of the strategy. While Iran’s leadership may be willing to absorb significant economic pain, the U.S. faces its own constraints, including potential strain on military resources and growing risks to global energy markets.

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«There are no midterms. There are no primaries. There are no sell-by dates for Iran,» Miller said. «And Trump has a sell-by date.»

The White House did not respond to a request for comment. 

For now, both sides appear to be waiting for the other to lose the political will to sustain the standoff, with global energy markets caught in the middle.

Audias Flores Silva, “El Jardinero”, era uno de los posibles sucesores de «El Mencho».

También arrestaron al presunto operador financiero del CJNG