US, Europe in trade spat amid subsidy race and ‘need to maintain fair competition’
- EU is unsettled by multi-billion-dollar US Inflation Reduction Act that lavishes subsidies and tax cuts for American purchasers of EVs if they ‘Buy American’
- EU leaders say response is needed that ‘allows us to match what the Americans are doing’ and safeguards Europe’s economic, industrial and technological base
EU leaders debated how to protect their industries from subsidised American competition, amid fears of a state spending race between the economic superpowers.
Arriving at an EU summit, French President Emmanuel Macron said a response was needed “to maintain fair competition”, one which “allows us to match what the Americans are doing”.
The European bloc is unsettled by parts of a multi-billion-dollar US Inflation Reduction Act (IRA) that lavishes subsidies and tax cuts for US purchasers of electric vehicles – if they “Buy American”.
The European Commission sees that as discriminatory against European car manufacturers, a breach of World Trade Organization rules, and a threat to investment in Europe.
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It is urging EU leaders to sign off on a plan that would loosen state aid rules and boost public investment in cleaner energy.
