July of last year, the us congress passed joe biden’s inflation reduction act in order to support america’s green economy and combat climate change. the act provides a tax credit of up to $7,500 (â£6,000) for those who purchase american-assembled passenger vehicles, creating tension with many european nations who see it as an attempt to capture a share of europe’s high tech manufacturing industry. this has caused a global race for the dominance of green technology between the us and the eu, and some east asian nations have registered their displeasure.
Inflation reduction act has been met with both criticism and praise since it was passed. svein tore holsether, ceo of norwegian fertiliser company yara, has commented that the us is putting in place a system that incentivises and drives investment in carbon sequestration and green production. french finance minister bruno le maire told the press that they should not underestimate the impact of the inflation reduction act. president macron has been clear that they want to get some exemptions from the us administration. mr le maire and his german counterpart will visit washington soon to raise these concerns, and german chancellor olaf scholz has already held direct discussions with top us senators and members of congress. ireland’s leader leo varadkar said his country was “not happy” about the inflation reduction act and that there will have to be a response from the european union.
White house established a us-eu task force to address these issues, and the uk’s stance is uncertain. business secretary grant shapps has discussed the details with us counterparts, and has expressed that the uk does not need the same package of green incentives as the us. shapps has also spoken to climate envoy john kerry, and believes the us bill needs to have its “protectionist edges” removed. leaders discussing the inflation reduction act with their us counterparts have reassured that it was not aimed at europe, but was an accident. there is a redirection of investment away from existing homes at a time when many industries are undergoing major transformations, causing some in british industry to fear an eu-us carve up.