U.S./EU Spark a Trade Spat Over Limitations in the Inflation Reduction Act
Europe is bracing for a confrontation with Washington over the Inflation Reduction Act--the new law that encourages businesses to invest more in the U.S.
Europeans argue that the act is a beggar-thy-neighbor scheme designed to lure investors away from Europe, just as the region's economy teeters on the verge of recession.
Talks on the trade skirmish continue today.
The European Union should improve its state aid rules and consider a more green-transition funding to offset the possible distortions from the new U.S. climate and tax law, said European Commission President Ursula von Der Leyen.
"The new assertive industrial policy of our competitors requires a structural answer," declared Ursula von Der Leyen. "There is a risk that the Inflation Reduction Act could lead to unfair competition, could close markets and fragment critical supply chains. We must take action to rebalance the playing field... to improve our state aid frameworks. In other words: We need to do our homework in Europe and at the same time work with the U.S. to mitigate competitive disadvantages."
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