CNBC reported on an EU document that shows that the bloc has “serious concerns” about the U.S. Inflation Reduction Act, which “breaches international trade rules.”
The Inflation Act stated it would use $1.5 billion of its funds to improve its national laboratories. However, the EU saw this act in a different scope.
U.S. Secretary of Energy Jennifer M. Granholm welcomed the move and said, “The investments in national labs in President Biden’s Inflation Reduction Act will help drive clean energy innovation, boost our economy, lower costs for families, create good-paying American jobs, and combat the climate crisis here at home and around the world.”
As of August, the sweeping tax, health, and climate bill has been approved by U.S. lawmakers and includes a record $369 billion in spending on climate and energy policies. The landmark package comprises new tax credits for electric cars made in North America and increased support for U.S. battery supply chains.
European officials have acknowledged the green ambitions associated with this bill, but they are worried about “the way that the financial incentives under the Act are designed.” The EU listed nine tax credit provisions that it saw as problematic.
When asked about what would happen with the U.S. and the EU, Valdis Dombrovskis told CNBC that there needs to be a willingness on both sides if they want to resolve any of the issues which exist.
The U.S Trade Representative’s office did not return a request for comment Monday, respectively according to CNBC. The U.S Treasury highlighted an article from last month where U.S. Treasury Secretary Janet Yellen said she had heard about the concerns but played down the chances of any changes to the package.
Representatives of the EU discussed several issues relating to United States trade policy in Brussels, including financial service equivalency and intellectual property protection.
This week, German finance minister Christian Lindner told CNBC that he was worried about the consequences due to the Inflation Reduction Act. “I’m not sure what kind of pressures we will see on a weaker euro,” he said. “Our common approach should be that value partners should stay preferred trade partners.”
“We’re open to it if both sides agree,” said Lindner. But at the moment, we have to evaluate the Inflation Reduction Act with its consequences for our industries. We need to let the U.S. side know of our serious concerns, and I’m not sure they’re aware of the way we’re concerned.”
Europe has previously spoken out against the policy, with Margrethe Vestager, Europe’s competition chief, saying last month that “as a matter of principle, you should not put this up against friends,” according to the Financial Times.
The EU is concerned about the potential of new trade barriers on European electric vehicle producers. And it’s not just the EU- South Korea has come up with the same concern.
Director general of the World Trade Organization, Ngozi Okonjo-Iweala, said Monday that countries must be cautious about their tariff policies. They should not be discriminatory or favor domestic goods.
Speaking with CNBC’s Dan Murphy at the COP27 climate summit in Egypt, she recognized that some nations feel the “subsidies for electric vehicles may be discriminatory against their electric vehicle production.”
The information contained in this post is for general information purposes only. The information is provided by FinanceOpinion.net and while we endeavor to keep the information up to date and correct, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to the website or the information, products, services, or related graphics contained on the post for any purpose.