Does the American subsidies on semiconductor technology give a legitimate excuse for other countries to "illegally" subsidize their own industries?
US-made chip production slid from 37% of the market in 1990 to just
12% last year, JPMorgan Chase & Co. estimates. That may eventually
change however as Commerce Secretary Gina Raimondo moves to deploy
$52.7 billion for research, development, manufacturing and workforce
Raimondo said the new federal funding will have a multiplier effect as
companies use the subsidies to pull in private-sector money. The hope
is to unlock an additional $200 to $400 billion, she said.
A subsidy granted by a WTO member government is prohibited by the
Subsidies Agreement if it is contingent, in law or in fact, on export
performance, or on the use of domestic over imported goods. These
prohibited subsidies are commonly referred to as export subsidies and
import substitution subsidies, respectively. They are deemed to be
specific and are viewed as particularly harmful under the Subsidies
Agreement and U.S. law. (Special rules apply to agricultural subsidies
under the WTO Agreement on Agriculture.) Actionable Subsidies
A subsidy granted by a WTO member government is “actionable” under the
Agreement (again, certain exceptions are made for agricultural
subsidies) if it “injures” the domestic industry of another country,
or if it causes “serious prejudice” to the interests of another
country. Serious prejudice can arise in cases where a subsidy:
impedes or displaces another country’s exports into the market of the subsidizing country; impedes or displaces another country’s exports to third countries; significantly undercuts the price of a “like product” (e.g., an identical or similar product produced by another country; or, increases the world market share of the subsidizing country for a particular primary product or commodity.
I believe that these are illegal subsidies, because it will hurt TSMC over the long run as other technology companies will be able to surpass TSMC in critical technologies. Does this give other countries an excuse to spend a few billions to an unlimited amount of money to subsidize their companies?