The US-China technology war and its effects on Europe

Summary:

The technology war between the United States (US) and China has taken a new turn as the two countries’ race to subsidise their industries gathers pace. The lack of an ambitious response and flexible business support measures from the European Union (EU) could have serious consequences for European competitiveness and industrial development.

This paper analyses the economic and political causes and developments in the technology war between the US and China, which began in 2015 and continues to escalate. The Biden Administration has complemented export control measures with a drive to maximise the technological distance between the two competitors through large-scale incentives in the form of subsidies and tax breaks. However, these introduce dangerous imbalances into the global playing field, with the potential to affect other actors such as the EU.

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