Europe shows united front against Biden’s anti-inflation law

German Federal Finance Minister Christian Lindner (left) and French Economy, Finance and Recovery Minister Bruno Le Maire (right) both criticized US anti-inflation laws as discriminatory against European companies.

Thierry Monasse | Getty Images News | Getty Images

EU member states are staunchly opposed to President Joe Biden’s anti-inflation legislation, fearing it will harm their businesses and economies.

A wide range of US legislation, approved by US lawmakers in August and containing a record $369 billion in spending on climate and energy policy, was debated by 27 EU finance ministers on Tuesday. It came after the European Commission, the enforcement agency, said it had “serious concerns” about the design of the package’s financial incentives.

“Ministers agreed that this is a matter of concern at European level and we need to see what the best response is,” it said, following the ministers’ discussion, but due to the highly confidential nature of the matter. An EU official who wished to remain anonymous. Problem, he told CNBC.

“There is a political consensus (among the 27 ministers) that the plan threatens European industry,” the official added.

The EU has listed at least nine items in the US Inflation Reduction Act that may violate international trade rules. One of the biggest issues for Europeans is the tax credits given to electric vehicles manufactured in North America. This could pose a challenge for European automakers focused on EVs. Volkswagen.

“That’s what we ultimately want. The EU, as a close ally of the United States, should stand on par with Mexico and Canada,” EU trade chief Valdis Dombrovskis told a news conference. Stated. meeting on Tuesday.

I don’t want to see any decisions that could harm this level playing field.

Bruno Lemaire

Minister of Finance of France

A series of US measures also hyundai Others, from doing business in the United States.

Another senior EU official who followed the ministers’ discussions but requested anonymity due to the sensitive nature of the issue said the conversation “wasn’t very deep” and underscored unity among ministers at a broader level.

The same official said France’s Finance Minister Bruno Le Maire was not calling for a strongly negative decision against America’s friends in the EU, but for a “wake-up call” to the necessary European counterparts. He said that he told his counterpart that Protect the interests of European companies.

Earlier Monday, Le Maire told CNBC: [to] US partner [that] Behind this inflation reduction law is the potential to maintain a level playing field between the US and Europe. ”

“The level playing field is at the core of the trade relationship between the two continents and we do not want to see any kind of decision that could undermine this level playing field,” he said.

French officials have long advocated strategic independence. For example, the idea is that the EU needs to become more independent from China and the US, perhaps by supporting its own industries. Last month, French President Emmanuel Macron suggested that the EU should also consider a “by European act” to protect European automakers.

“We need a law to buy Europe like Americans and we need to reserve [our subsidies] “There is China protecting industry, the US protecting industry and Europe with open houses,” Macron said in an interview with France 2.

The task force between European and American authorities, which held its first meeting on the issue last week, will meet weekly to discuss ways to address Europe’s concerns about the Inflation Reduction Act.

The White House said in a statement: “It aims to continue to raise awareness about meaningful progress in legislation on reducing household costs, shared goals on climate change, and opportunities and concerns for EU producers.” rice field.

Despite regular communications, US officials are dealing with the midterm elections and the Inflation Reduction Act is already in law, so changes must come at the implementation stage.

Fredrik Eriksson, director of the European Center for International Political Economy, told CNBC: “It is clear that the EU has legitimate concerns about the Inflation Reduction Act and the direct and indirect discrimination within it. is,” he said.

“Many of the IRA’s ‘America first’ policies will hurt competition and EU businesses, especially in areas where the EU is competitive, such as green industry and cleantech. I might go [World Trade Organization] It’s important to sort out these issues, but it’s much more interesting to deal with them bilaterally,” he added.

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