Thierry Monasse | News Getty Images | Getty Images EU member states are standing firm against President Joe Biden’s anti-inflation law amid fears it will hurt their domestic companies and economies. The sweeping US legislation, which was approved by US lawmakers in August and includes a record $369 billion in spending on climate and energy policies, was discussed by the EU’s 27 finance ministers on Tuesday. This came after the European Commission, the EU’s executive arm, said there were “serious concerns” about the design of the stimulus package. “Every minister agreed that this is a matter of concern at the European level and that we have to see what the best response is,” an EU official, who attended the ministers’ discussions but preferred to remain anonymous due to the sensitive nature of the issue, told CNBC. The same official added that “there is a political consensus (among the 27 ministers) that this plan threatens European industry”. The EU has listed at least nine points in the US deflation law that may violate international trade rules. One of the biggest hurdles for Europeans is the tax credits granted for electric cars made in North America. This could bring challenges to European automakers that focus on electric cars, such as Volkswagen. “This is ultimately what we’re after: for the EU to be, as a close ally of the US, in a position more similar to that of Mexico and Canada,” Valdis Dombrovskis, the EU’s trade chief, told a press release. conference on Tuesday. We don’t want to see any kind of decision that could harm that level playing field. Bruno the Mayor Minister of Finance of France South Korean officials have also raised similar concerns in Europe, given that the set of measures in the US could also restrict Hyundai and others from doing business in America. A second EU official, who also attended the ministers’ discussions but preferred to remain anonymous due to the sensitive nature of the matter, said the talks were not “very deep” – underscoring the unity between the ministers at a wider level. The same official said France’s finance minister, Bruno Le Maire, had told his counterparts that he was not asking for a strong negative decision against US friends of the EU, but was asking for a “wake-up call” for his European counterparts to protect their interests. of European businesses. Earlier on Monday, Le Maire told CNBC: “We have to be very clear, very united and very strong from the beginning explaining [to] our partners in the USA [that] What is at stake behind this deflation law is the ability to maintain a level playing field between the United States and Europe.” “A level playing field is at the core of the trade relationship between the two continents and we don’t want to see any kind of decision that could harm that level playing field,” he said. French officials have long advocated strategic independence – the idea that the EU should be more independent from China and the US, for example, by supporting its own industry. Last month, French President Emmanuel Macron suggested the EU should also consider a “European Market Law” to protect European carmakers. “We need a European market law like the Americans, we need to reserve [our subsidies] for our European manufacturers,” Macron said in an interview with France 2, adding: “You have China protecting its industry, the US protecting its industry and Europe being an open house.” A working group between European and US officials, which had its first meeting on the issue last week, will now meet weekly to discuss how to address Europe’s concerns about the deflation law. The idea is to “continue to foster a deeper understanding of the law’s meaningful progress in reducing costs for families, our shared climate goals, and the opportunities and concerns for EU producers,” the White House said in a statement. . Despite the regular contact, US officials are busy with midterm elections and the deflationary law has already been enacted, meaning any changes will have to come during the implementation phase. Fredrik Eriksson, director of the European Center for International Policy Economy, told CNBC that “it is clear that the EU has legitimate concerns about the deflation law and direct and indirect discrimination in it.” “Many of the IRA’s policies that adopt an ‘America first’ attitude will harm EU competition and business, and especially in areas where the EU is competitive, notably green industries and clean technology. The EU can go in the WTO [World Trade Organization] to settle these issues, but is much more interested in them being addressed bilaterally,” he added.
