By Alexandra Alper

WASHINGTON, (Reuters) – The United States of America and the European Union will jointly announce a joint effort in order to avoid a “subsidy-race” while they struggle to increase production of rare semiconductor chips. This was a Senior Biden Administration official stated.

At the U.S. – EU Trade and Technology Council (TTC) second meeting, the move will be announced. It takes place in Paris on Sunday and Monday.

At its inauguration conference in Pittsburgh last year, the TTC promised to increase transatlantic cooperation, strengthen chip supply chains and curb China’s non market trade practices. It also pledged to take a more united approach to regulation of large, global technology companies.

A senior official from the administration said in an interview Friday that the transatlantic approach to investments in semiconductors would be announced. This was in order to secure supply security.

Washington and Brussels are both keen to stimulate chip investments, but they should also “do this in a coordinated way and don’t encourage a subsidy racing,” an official stated.

The persistent shortage of chips in both the electronics and automotive industries has caused production to be disrupted. Some firms have had to reduce their production. Congress has blocked U.S. legislation to grant chipmakers $52Billion in funding to increase output.

An early warning system that can pinpoint and deal with supply chain disruptions in the semiconductor industry would be part of the meeting. The meetings will feature Antony Blinken (Secretary of State), Gina Raimondo (Commercial Department Secretary) and Katherine Tai (U.S. Trade Representative).

Officials confirmed that Valdis Dombrovskis, EU chief of trade, and Margrethe Vestager (EU chief antitrust), will both be present.

Officials from the Council also announced a new collaboration scheme that was meant to fight disinformation online. This includes false Russian claims regarding its invasion of Ukraine. Moscow describes its actions in Ukraine as a “specially military operation.”