US Treasury Secretary Janet Yellen said again on Thursday that the Biden administration does not want, with its climate plan, to penalize its trading partners, especially Europeans, despite the concrete difficulties in writing these rules.
The goal of Congress was to make sure we have secure supply chains and to try to include our allies in that. We will therefore look at what can be done, assured journalists to the Minister of Economy and Finance of Joe Biden, during a trip to Fort Worth (Texas).
She referred to US subsidies given only to electric vehicles built in the United States, which also raise concerns.
We have the responsibility, at the Treasury, to write the rules concerning the various tax incentives. And we listen to a wide range of stakeholders to make sure we’re doing it right, Yellen said.
She thus underlined that one of the problems is to define the free trade partners, citing the example of the alliances with Europe in Japan, with which we do not have a formal free trade agreement.
The European Union has been concerned for several months about the effects of the IRA, the 420 billion dollar plan of the American President Joe Biden largely devoted to the climate and adopted last summer, and which was at the heart of the Washington State visit of French President Emmanuel Macron last week.
The subject was also discussed by the United States and the European Union on Monday, near Washington, as part of the meeting of the Council for Commerce and Technology (TTC).
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Ms. Yellen also insisted that the American economy can escape recession in 2023, despite still very high inflation (7.7% over one year in October).
I think we are on the right track to slow down inflation and that the recession can be avoided, thus declared the minister.
The persistence of this high inflation is pushing the central bank (Fed) to tighten monetary conditions more strongly before slowing down economic activity, and therefore inflation, but at the risk of causing a recession.
The Fed is due to meet on Tuesday and Wednesday, and is expected to raise its key rate by half a percentage point. This is still a strong increase, but it marks a slowdown compared to those adopted at the last four meetings, reflecting the first signs of a slowdown in inflation.