Joe Biden asked about the England vs America draw
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Brussels is facing an “existential threat” to its economy after US President Joe Biden pushed for tough “Buy American” trade rules. The American legislation has prompted the EU Commission to push on the emergency button to save Europe’s economy, which according to BusinessEurope President Fredrik Persson is “drowning”.
He said: “It’s a bit like drowning. It’s happening quietly.”
Ahead of a meeting with US President Joe Biden, French President Emmanuel Macron made clear that he and other European leaders remain deeply concerned about the incentives in a sweeping new climate-related law that favours American-made climate technology, including electric vehicles.
Mr Macron on Wednesday criticised the legislation, known as the Inflation Reduction Act, during a luncheon with US lawmakers and again during a speech at the French embassy. The French president said that while the Biden administration’s efforts to curb climate change should be applauded, the subsidies would be an enormous setback for European companies.
“The choices that have been made … are choices that will fragment the West,” Mr Macron said at the French embassy. He added that the legislation “creates such differences between the United States of America and Europe that all those who work in many companies (in the US), they will just think, ‘We don’t make investments any more on the other side of the Atlantic.’”
The row between the Brussels bloc and the US is also bad news for Brexit Britain, despite UK trade minister Kemi Badenoch’s efforts to convince the US to reduce its limitations on electric vehicle subsidies on Britain by giving exemptions.
Speaking to Express.co.uk, Associate Fellow at the Henry Jackson Society, Darren Spinck warned Britain should not expect preferential treatment from the Americans and should instead pursue bespoke trade partnerships in the Indo-Pacifc region to counteract potential losses resulting from the US legislation.
He said: “Prime Minister Sunak’s government should not expect any significant carveout exemptions from the Biden Administration for UK electric vehicle manufacturers impacted by ‘made in America’ subsidies in the U.S. Inflation Reduction Act. The White House is consumed by green energy policies which President Biden’s advisers believe will increase market share for US domestic electric vehicle production and help mitigate US dependence on China for EV batteries.
“While the UK’s own EV sector will be adversely impacted by a trade war between the US and EU over America’s protectionist provisions, the Biden Administration seems to have little regard for the impact of such policies on the United Kingdom.
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“It seems the White House has scant interest in increasing overall US-UK commercial ties, as there was no substantive discussion on advancing a free trade agreement between the two counties during the Prime Minister’s recent bilateral meeting with the U.S. President.
“Lately, the Biden Administration’s trade and economic policies have faced increasing scrutiny throughout Europe, with the Dutch resisting US semiconductor export controls, Germany allowing the sale of 35 percent of a Hamburg terminal to a Chinese entity, and Italy seeking stronger trade ties with Beijing.
“While export controls, investment restrictions, and industrial policy play a role in helping the West mitigate its commercial dependence on China, pro-growth economic policies which benefit trading partners with shared interests must be implemented as well.”
He added: “As the White House reckons with the limitations of its policies aimed at protectionism and decoupling from China, the UK should aim to establish economic policies in the best interests of the United Kingdom’s people and firms.
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“The emerging trade war between the US and EU and Washington’s apparent lack of interest in pursuing a free trade agreement with London presents the UK government with an opportunity to pursue an economic strategy in the Indo-Pacific which aims to deepen commercial ties with regional partners and mitigate economic dependency on China.
“This will require pro-growth economic policies domestically, which are necessary to encourage greater investment and bilateral trade with Indo Pacific partners, as well as a trade strategy focused on greater market access, energy security, supply chain diversification, reduced trade barriers, fewer tariffs, and agreements on subsidies.”
Speaking after his prepared remarks and without cameras present, President Macron took aim at the Inflation Reduction Act, calling the subsidies harmful to French companies and others in Europe, according to a person in the closed-door meeting. The person requested anonymity to discuss the private comments from the French leader.
Biden administration officials have countered that the legislation goes a long way in helping the US to meet global goals to curb climate change. White House press secretary Karine Jean-Pierre on Wednesday made the case that the legislation will also provide new opportunities for French companies and others in Europe.
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