When it has a problem with its American ally, the European Union (EU) always finds it difficult to admit it. But, in recent days, she had to agree: President Joe Biden, whom Europeans were so relieved to see succeed Donald Trump in the White House in early 2021, does not give them gifts. And when it comes to defending the American economy, he is willing to sacrifice theirs.
“At the beginning, we underestimated the consequences of the American strategy. But Europeans are beginning to understand that it can have a disastrous effect on our economy.”, comments a European diplomat. Friday, November 25, the trade ministers of the Twenty-Seven have finally begun to discuss the subject.
Armed with cheap energy that they sell at four times the price to Europeans and which, since the start of the war in Ukraine on February 24, has given them a crucial competitive advantage over the Old Continent, the United States has also decided to massively subsidize (369 billion dollars, or 355 billion euros) green products “made in America”, in particular electric cars, solar panels or batteries, within the framework of the law on the reduction of inflation (IRA), which will take effect on 1er January 2023.
The preferred diplomatic channel
For the Twenty-Seven, this means, very concretely, the risk of seeing their companies abandon the Old Continent to invest across the Atlantic. The exodus has already begun. For the time being, the diplomatic channel is preferred. Discussions are taking place between Washington and the European Commission, which pleads for the United States do not discriminate in their subsidies against European products – a favor obtained by Canada or Mexico.
In order to give them a chance, the Twenty-Seven have agreed to wait for the meeting of the Trade and Technology Council between the EU and the United States on 5 December. “The United States is not going to undo its law. They tell us that there is room for interpretation”confides a European diplomat, who does not expect ” not much “ ongoing negotiations.
If an amicable solution does not emerge, “we will have to think either of coercive measures, or of support measures for our businesses on European soil”, judge Olivier Becht, the French minister delegated to foreign trade. France is one of the most aggressive countries on the subject, and the President, Emmanuel Macron, will not fail to make his case during his visit to the United States next week.
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