The economy ministers of France and Germany will ask the US to make “aggressive” offers to European companies to entice their green investments across the Atlantic, French officials said this week ahead of a trip to Washington.
Bruno Le Maire of France and Robert Habeck of Germany spoke with White House officials Tuesday to outline EU concerns about President Joe Biden’s landmark climate legislation, the Inflation Reduction Act, and push for better cooperation are about to do.
The $370 billion US package, which includes hundreds of billions of dollars in subsidies for green tech, aims to boost investment in everything from electric carmakers to renewable energy producers. The bill, originally intended to challenge China’s green tech dominance, is conditioned on manufacturing being localized, which has raised fears that a growing number of businesses considering investing in Europe may instead turn to the US. Will increase
French officials said Le Maire and Habeck would ask the US not to go above and beyond that framework by trying to actively poach EU businesses. Representatives of economic bodies from several US states, including Michigan and Ohio, have visited Europe in recent months to pitch for the stimulus.
“What we are seeing is not only waivers, but also mutual understanding to avoid a subsidy race and aggressive tactics involving the US administration to ask European companies if they can want to relocate factories. America,” said one of the French officials. “You don’t do that between friends.”
The second officer said there was “enough room for everybody”.
During their joint visit to Washington, Habeck and Le Maire will meet with US Treasury Secretary Janet Yellen, Trade Representative Catherine Tay and Commerce Secretary Gina Raimondo.
The EU has repeatedly pressed for waivers in the US climate package so that some European businesses can benefit from subsidies without uprooting their production. Lower energy costs in the US, which are less directly affected by Russia’s invasion of Ukraine on global markets for oil and gas, are making that market more attractive to some producers.
Le Maire and Habeck’s visit, intended as a show of unity between France and Germany at a time when relations in Europe have been strained by the energy crisis and the fallout of the Ukraine war, is unlikely to yield much in terms of additional officials. said, regal-room.
The main exemption granted so far allows electric cars manufactured outside North America to qualify for some tax credits offered to US drivers, a change that could particularly benefit German auto makers.
German officials have expressed concern that some in the US Congress want to renegotiate the agreement on electric cars. “There have been attempts by some to reopen it and we want to signal how important it is to us that this settlement is preserved,” said Ek.
German and French officials said Haibeck and Le Maire also hope to persuade the US to show more flexibility when it comes to local production requirements contained in the IRA for a key material used in electric car batteries – a An area where there are already cooperation treaties between the EU and the US. They will also press for transparency on the level of US subsidies given to businesses, which could allow the EU to match some of the incentives.
The European Commission is generally in charge of trade policy for the bloc. However, a German official said that it was “very important [France and Germany] explain [to the US] What kind of impact can the IRA have on us from a national perspective, and the challenges it presents”, he said.
The European Union is preparing its response to the US climate programme, including easing restrictions on subsidies in Europe and additional funding for green tech businesses.
