Ursula von der Leyen says chips are ‘bedrock of our modern economies’ but the pandemic has exposed supply vulnerabilities

The European Union has announced a €43bn ($48bn) plan to overcome its dependency on Asian computer chip makers as governments and businesses around the world battle with a global supply chain crisis that experts believe could persist for much of the year.

With consumers having to wait months for cars, dishwashers and other durables thanks to chip shortages, the bloc’s plan marks one of the most significant developments yet seen as a result of the tectonic shifts in the global economy set off by the coronavirus pandemic.

In the US, Harley Davidson said its customers would have to bear the brunt of component price rises, and Starbucks said it was raising its prices for the third time since October, while FedEx’s air cargo arm was booming as businesses sought a way around bottlenecks.

In Europe, the UK’s biggest private employer, Tesco supermarket, said food inflation will hit 5% this spring on the back of tighter supply, the price of beer was rising due a “vicious cycle of costs”, and truck maker Iveco reported protracted supply chain issues on Tuesday.

In Australia, analysts at Commonwealth bank this week said Covid-induced supply chain disruptions and labour shortages continued to drive a big lift in price pressures for businesses, weakening business confidence. On the upside, small-town butchers were thriving thanks to supply shortages leaving supermarket shelves bare.