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French President Emmanuel Macron snatches unexpected victory from his US counterpart during a visit to Washington on ThursdayJoe Biden to suggest that European companies could benefit from a controversial US subsidy package.
Fury Europe is on fire The complaint came after it became clear that Biden’s Inflation Reduction Act – a $369 billion package for green industry – could drain investment from the European Union and into the US in large car-making countries such as France and Germany that the US law was illegal for potentially discriminating against foreign companies in the electric vehicle sector and encouraging consumers to “Buy American”.
Macron’s visit to the US was seen as a last-ditch effort by the EU and the US to secure a truce on Washington’s generosity before becoming embroiled in a subsidy race or a full-blown trade war with countervailing tariffs.
Europeans are pressing to get the same rights as Mexicans and Canadians to benefit from the green cash bonanza, but there seems little chance of success. For weeks, the French have been campaigning for European partners to agree their own rival subsidy package, which includes a “Buy European” component.
Feather a friendly news conference With Macron on Thursday, however, Biden has covered much more ground than he thought possible.
“There are tweaks that we can make that basically make it easier for European countries to participate and or be on their own, but that’s something that has to be worked out,” the US president said. “It was never my intention to exclude people who were collaborating with us. That was not the intention. We’re back in business, Europe is back in business. And we’re going to create manufacturing jobs in America.” Will continue, but not at the cost of Europe.”
The question of whether to exclude Europe has been one of the major bones of contention. At a time when Europe is paying dramatically higher energy prices than the US, many Europeans view the Inflation Reduction Act as a hostile attempt to profit from European weakness.
Many top European officials have been arguing that the EU and the US need to join forces against China instead of competing against each other.
The argument seemed to be making progress with Biden. Making “no apologies” for the law, which he said was vital to creating American jobs, he said parts of the IRA may need to be fixed. “Obviously there are going to be glitches and [we] It needs to accommodate the changes,” he said.
He said the exemption was granted for companies that had free trade agreements with the US, but suggested it should be extended more to “allies”.
“There’s a lot we can work on,” he continued.
Macron also seemed upbeat about the way things were unfolding.
Macron said, “We had a very good discussion on the IRA and decided to synchronize our approaches … as well as our investments, because we share the same strong will to secure our industries.”
It remains to be seen, however, how much can be achieved in practice and whether Biden was making more concessions in his friendly public appearances with Macron than he would actually be able to give. For example, he may face hostility in Congress over attempts to go back and tinker with historic initiatives like the IRA.
It is unclear how far Biden’s administration will go in resolving the issues for the Europeans on a technical level, as teams from both sides still need to hash out the details. The US President said the two leaders had agreed to allow their teams to “follow up” on their decisions.
It passes the small print on to the EU-US task force in charge of leading talks on trying to resolve differences on the package, but EU officials have expressed skepticism about how much progress can be made at this stage. Can
For the French, Biden’s unexpected concession paradoxically risks undermining Macron’s campaign to get the EU to roll out its own protectionist answer to the IRA at home.
Prior to the trip, an adviser to Macron was telling the press that the IRA’s answer “ultimately lies in Europe’s ability to enter the competition … and that is the ‘Buy European Act.'”
French Finance Minister Bruno Le Maire is set to continue trade discussions with US officials on Friday.