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The two blocs agree to limit the money they will spend to lure chip manufacturers.

The United States and European Union will announce a joint effort to avert a “subsidy race” as they scramble to boost production of scarce semiconductor chips, according to a report in Reuters.

A “senior Biden administration official” said the move will be unveiled at the second meeting of the U.S.-EU Trade and Technology Council (TTC), taking place on Sunday and Monday in Paris.

The TTC pledged at an inauguration conference last year in Pittsburgh to deepen transatlantic cooperation to strengthen chip supply chains, curb China’s non-market trade practices, and take a more unified approach to regulating big, global technology firms.

“You’ll see us announce… a transatlantic approach to semiconductor investments aimed at ensuring security of supply,” a senior administration official told reporters in a call Friday previewing the meeting.

The chip shortage is causing governments worldwide to scramble

Both Washington and Brussels want to encourage chip investment, and to “do so in a coordinated fashion and don’t simply encourage a subsidy race,” the official added.

A persistent industry-wide shortage of chips has disrupted production in the automotive and electronics industries, forcing some firms to scale back production. But U.S. legislation that would grant chipmakers $52 billion in funding to expand output has been stuck in Congress.

The official said an early warning system to pinpoint and address semiconductor supply chain disruptions would also be announced as part of the meeting, which will be headlined by Secretary of State Antony Blinken, Commerce Department Secretary Gina Raimondo, and U.S. Trade Representative Katherine Tai.

EU trade chief Valdis Dombrovskis and EU antitrust chief Margrethe Vestager will also participate, the official said.

The two blocs will also coordinate on the propaganda front

The Council will also announce a new cooperation scheme for propaganda, the Reuters article said. The Biden official said the program was intended to combat “disinformation” online. Specifically targeted would be “false” Russian claims related to its invasion of Ukraine. Moscow calls its actions in Ukraine a “special military operation.”

The cooperation could entail the EU creating their own version of the US’s “Disinformation Governance Board” recently launched by the US Department of Homeland Security.

Also read: Germany seeks to tempt chipmakers with 14 billion euros in state aid.