US, EU Try To Avoid Subsidy Race Over Chip Production

The European Union and the US are soon to announce a joint effort to avert a “subsidy race” as they look to boost production of semiconductor chips, a senior Biden administration official said.

This new joint effort will be unveiled at the second meeting of the US-EU Trade and Technology Council (TTC), taking place on Sunday and Monday in Paris.

The Trade and Technology Council was first proposed at a conference last year in Pittsburgh and is intended to deepen transatlantic cooperation to strengthen chip supply chains, curb China’s non-market trade practices, and take a more unified approach to regulating global technology firms.

“You’ll see us announce… a transatlantic approach to semiconductor investments aimed at ensuring security of supply,” a senior administration official told reporters in a call Friday previewing the meeting.

Both DC and Brussels want to encourage chip investment, and to “do so in a coordinated fashion and don’t simply encourage a subsidy race,” the official added.

A persistent industry-wide shortage of chips has disrupted production in the automotive and electronics industries, forcing some firms to scale back production. But US legislation that would grant chipmakers US$52 billion (A$75 billion) in funding to expand output has been stuck in Congress.

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