Europe shows a united front against Biden’s deflationary act

Europe shows a united front against Biden’s deflationary act

Europe shows a united front against Biden’s deflationary act

German Federal Finance Minister Christian Lindner (L) and French Economy, Finance and Recovery Minister Bruno Le Maire (R) both criticized the US deflation law for discriminating against European companies.

Thierry Monasse |: Getty Images News |: Getty Images:

EU member states stand firmly against the president Joe BidenThe deflationary act amid fears it would hurt their domestic companies and economies.

The sweeping US legislation passed by US lawmakers in August includes: a record $369 billion in spending on climate and energy policy, the 27 finance ministers of the European Union discussed on Tuesday. It came after the European Commission, the EU’s executive body, said there were “serious concerns” about the design of financial incentives of the package.

“Every minister agreed that this is a matter of concern at the European level and that we need to see what the best response is,” said an EU official who followed the ministers’ discussions but spoke on condition of anonymity because of the sensitive nature of the issue. release, CNBC said.

The same official added that “there is a political consensus (among 27 ministers) that this program threatens European industry.”

The EU has identified at least nine items in the US deflationary act that could run afoul of international trade rules. One of the biggest challenges for Europeans is the tax incentives for electric cars made in North America. This could pose challenges for European automakers focusing on EVs such as Volkswagen:.

“That’s what we’re ultimately after. that the EU, as a close ally of the US, should be in a position more similar to that of Mexico and Canada,” said EU trade chief Valdis Dombrovskis. conference on Tuesday.

We don’t want to see any kind of decision that could harm this level playing field.

Bruno Mayor

Minister of Finance of France

South Korean officials have also expressed similar concerns to Europe, given that the series of events in the US may also be limited. Hyundai: and others from doing business in America.

A second EU official, who also followed the ministers’ discussions but spoke on condition of anonymity because of the sensitive nature of the matter, said the talks were “not very deep”, underscoring ministers’ unity at a broader level.

The same official said that French Finance Minister Bruno Le Maire told his colleagues that he was not asking for a strong negative decision against US friends in the EU, but was asking for a “wake-up call” to his European partners who should: protect the interests of European business;

Earlier on Monday, Le Maire told CNBC: “We have to be very clear, very united and very strong in explaining from the very beginning. [to] Our US partners [that] What is at stake behind this deflationary act is the possibility of maintaining a level playing field between the United States and Europe.”

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

Europe shows a united front against Biden’s deflationary act

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 “Buy European Act” to protect European carmakers.

“We need a ‘Buy European Act’ like the Americans, we need to make reservations [our subsidies] for our European producers,” Macron said in an interview with France 2 television, adding: “You have China protecting its industry, the US protecting its industry and Europe being open.”

A working group between European and US officials, which held its first meeting on the subject last week, will now meet weekly to discuss how to address Europe’s concerns about the deflationary act.

The idea is to “continue to contribute to a deeper understanding of the law’s meaningful progress on reducing costs for families, our shared climate goals and the opportunities and concerns for EU producers”. The White House said in the statement.

Despite regular contacts, US officials are dealing with mid-term elections and the Deflation Act has already been enacted, meaning any changes would have to be implemented in the implementation phase.

Fredrik Eriksson, director of the European Center for International Political Economy, told CNBC that “it is clear that the EU has legitimate concerns about the deflationary act and direct and indirect discrimination in it.”

“Many of the EU’s policies, which take an ‘America First’ stance, will hurt competition and EU companies, and especially in areas where the EU is competitive, especially green industries and cleantech. The EU can go to the WTO. [World Trade Organization] to solve these issues, but it is much more interested that they be solved bilaterally,” he added.

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