The European Union is beginning to lose patience with the lack of responses from Washington to its complaints about the law to reduce inflation designed by the Biden administration, a massive incentive plan for the development of clean energy and technologies such as the electric car that it leaves out those manufactured in community territory. Hours before the mid-term elections in the United States, several European leaders yesterday reminded the White House that it must address its concerns or bear the consequences.
“I am not sure that the Americans have correctly understood the magnitude of our concerns”, lamented the German Finance Minister, Christian Lindner, upon his arrival at the Eurogroup held yesterday in Brussels. "Now the correct thing is to seek dialogue to discuss our concerns and find ways to combine mutual economic interest," advocated the German liberal, who called for doing "everything possible to avoid a trade war."
Less conciliatory was the French Finance Minister, Bruno Le Maire. “Our concern about these massive American subsidies, which can distort competition, is very high and we hope that the European Commission will propose a strong response to this American policy”, defended Le Maire without excluding anything in the event that the United States, now that they will have past the elections, do not move tab. The European Commissioner for Industry, Frenchman Thierry Breton, has openly evoked the possibility of counterattacking the American offensive commercially and of taking the case to the World Trade Organization.
Indeed, barely overcome the tensions of the stage of President Donald Trump, who imposed tariffs on European steel and aluminum, the threat of a new trade war between the two blocs flies over the Atlantic. The managing director of the WTO, Ngozi Okonjo-Iweala, has begged the EU and the United States not to engage in "a public aid war", although she has avoided commenting on the allegedly discriminatory elements that, according to Europe, the American law includes .
The law to reduce inflation was approved by the United States Congress in August and contains measures worth 739,000 million dollars, of which 375,000 million dollars are directed to policies against climate change, an unprecedented federal investment on this ground. When the small print became known, Europe quickly made Washington aware of its concern about the implications of the law, which excludes products manufactured outside the United States from aid. The plan includes, on the one hand, tax incentives for companies that establish themselves in the country and, on the other, aid of 7,500 dollars to consumers for the purchase of electric cars manufactured in North America.
At the end of October, the US Secretary of Commerce, Katherine Tai, traveled to Prague to meet with the European trade ministers, who made their aspirations clear: that electric cars manufactured in Europe have the same treatment as those assembled in Canada and Mexico, trade partners for which the law does provide exceptions. Both parties have created a high-level working group to discuss the issue.
The EU's accusations are categorical: five measures in the plan are "discriminatory" and violate WTO rules. The White House, however, has not moved. Although Joe Biden may have a freer hand after today's election, the prospect of the House of Representatives passing into Republican hands makes the prospects for change even less rosy for European business interests.
