Biden Sparks a $2 Trillion Arms Race Over Chips, Green Subsidies
US allies are responding with their own incentive programs even as they warn of an economic war.
When French President Emmanuel Macron arrived in Washington for a state visit in December, he groused that it’s not in America’s interest if much of Europe’s industry is “just killed.” South Korean President Yoon Suk Yeol, who visited the White House on April 26, has warned of a widening “economic war” of government subsidies and tax perks that could leave all nations worse off.
Both were expressing alarm at the international fallout of the US-China rivalry and President Joe Biden’s Made in America policies. Europe and South Korea—important trade and security partners for the US—are among the most exposed to the Biden administration’s two-pronged agenda of supporting strategic industries such as electric vehicles, semiconductors and artificial intelligence while working to hobble China’s efforts to make advances in those same fields for military purposes.