US Inflation Reduction Act Sparks Fears of Trade War, EU Must “Adjust” Rules to Compete

Us inflation reduction act (ira) was discussed this week between us president joe biden and french president emmanuel macron. the legislation provides tax breaks to incentivise climate-friendly technologies, and some eu members have criticised the us plan, raising fears of a trade war. eu commission president ursula von der leyen said the eu should “adjust our own rules” in response to the us plan.

Conversation between the two leaders took place during macron’s trip to washington to meet biden this week. the us president said there could be “tweaks” made to make it easier for european firms to benefit from the subsidies package. biden also said the us and europe are “back in business” and will continue to create manufacturing jobs in america.

Us plan is worth $430bn (â£349bn) and is perceived by european allies as anti-competitive and a threat to european jobs, especially in the energy and auto sectors. von der leyen said the eu had to work with the us “to address some of the most concerning aspects of the law”. the eu must also “adjust” its own rules on state aid to spur public investment in the environmental transition. competition must respect a level playing field, according to von der leyen.

By Evey Lovelace

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