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U.S., EU must avoid subsidy race amid chip shortage

by Mike Robinson

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© Reuters. FILEPHOTO: Margrethe Vestager is the Vice-President of Europe Fit For the Digital Age for the European Commission. She speaks during the Berlaymont Meeting of the College of Commissioners, Brussels, Belgium. This was November 10, 2021. Stephanie Lecocq /Po

(Reuters) – The United States of America and the European Union should not be in a sub-subvention race, as they rush for support to semiconductor production amid a worldwide shortage, Margrethe Vestager, EU Competition Commissioner said Friday.

Vestager, who was speaking at University of Leuven warned that a subsidy race is not an option, and that everyone would be left poorer if it happens.

In the current circumstances, companies might find it hard to resist the temptation of trying to play out governments against each other, scanning the landscape for who will be paying more. “The risk, however, is letting taxpayers, American or European, pay the bill, and maybe getting very little from this investment.” she said.

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