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The difficult quest for a common European response to American protectionism

It’s not a hemorrhage yet, but it could be. Every day, in Europe, an industrialist announces that he is going to invest in the United States or that he is thinking of doing so. In recent weeks, in Germany, we learned that the car manufacturers Volkswagen or BMW wanted to increase their production capacity there or that the Swedish Northvolt could finally open the gigafactory of batteries there which it was to install across the Rhine. In Belgium, the chemist Solvay has decided to participate in a giant battery project across the Atlantic. The French Saint-Gobain will expand in California. As for the Spanish energy company Iberdrola, it wishes to devote nearly half of its investments in the coming years to the new world…

Between energy prices, three to four times higher on the Old Continent, and President Joe Biden’s Inflation Reduction Act (IRA) – an envelope of 369 billion dollars intended to boost the American green industry with blows tax credits and subsidies reserved for “made in America” – the United States is more attractive than ever.

Faced with the scale of the disaster that is looming, Europeans are worried. Monday, December 5, the subject was raised by the United States-European Union Trade and Technology Ministerial Council (TTC), this forum supposed to support the renewal of transatlantic relations after the Trump era, which held its third edition on the campus of the University of Maryland. But no one expected much, starting with the Commissioner for the Internal Market, Thierry Breton, who had also decided not to go there.

In fact, the meeting – which was attended on the American side by the Secretary of State, Antony Blinken, the Secretary of Commerce, Gina Raimondo, the Trade Representative, Katherine Tai, and on the European side, the Vice-Presidents of the European Commission, Valdis Dombrovskis and Margrethe Vestager – failed to advance. With the IRA, “The most important thing is that the United States is tackling the fight against climate change”concluded Margrethe Vestager

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Startup delay

After a start delay – on August 16, Ursula von der Leyen welcomed in a tweet that the IRA asks “the basics of a clean energy economy” –, the President of the Commission is beginning to think about the European counter-offensive. On December 4, in front of the College of Europe in Bruges, she judged that the Washington IRA “requires a structural response” of the Twenty-Seven. With each crisis, whether it is that of Covid-19 or energy, the president of the community executive has taken some time to react. This time, it took him three and a half months to begin the outline of a battle plan. Attached to the transatlantic relationship and to the rules of the World Trade Organization (WTO), anxious to keep a united front between the EU and the United States against Moscow in these times of war in Ukraine, Ursula von der Leyen did not want to come into conflict with Washington.

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