U.S., Europe Need a Grand Bargain on Semiconductors and Electric Vehicles to Counter China
wsj.comThe U.S. and its allies agree they need to reduce their dependence on China. They also agree none can do so alone: No country is big enough to sustain an entire supply chain. Thus the frequent calls for “friend-shoring” among “like-minded partners.” At a meeting this week the U.S. and the European Union pledged “coordinated action to foster supply chain diversification (and) build resilience to economic coercion.”
Behind this rhetorical camaraderie, though, old habits of protectionism and parochialism are reappearing. First, South Korea, Japan and the European Union complain that the electric-vehicle subsidies in the Inflation Reduction Act, which President Biden signed into law in August, discriminate against their manufacturers and suck investment from them. Second, those same allies have rebuffed U.S. calls to join its restrictions on the export of sensitive semiconductor technology to China.
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