Europe Threatens New Tariffs Over Biden’s ‘Buy American’ Tax Credits
A tax credit encouraging American manufacturing contained in President Joe Biden’s Inflation Reduction Act (IRA) has raised the ire of European policy makers, who say the credit is protectionist and will hurt European exporters.
European Union (E.U.) leaders expressed frustration with the electric vehicle (E.V.) component of the Buy American tax credits last month, with the E.U. Commissioner for Competition Margrethe Vestager saying, “As a matter of principle, you should not put this up against friends,” and French President Emmanuel Macron calling for a Buy European program. Now, the bloc says it will possibly target nine other American tax credits included in the IRA for protectionist retaliation.
While signaling his openness to a new trade agreement with the U.S., German Finance Minister Christian Lindner told CNBC, “We should be open for it, if both sides agree but at the moment we have to analyze the Inflation Reduction Act with its consequences for our industries.”
Biden appears to have no intention of scaling back the IRA’s protectionism. Speaking to the 27th Conference of the Parties in Egypt, Biden said, “This summer, the United States Congress passed and I signed into law my proposal for the biggest, most important climate bill in the history of our country, the Inflation Reduction Act. It includes…$368 billion to support clean electricity, everything from offshore wind, to distributed solar, zero-emission vehicles, and sustainable aviation fuels; more efficient electrified buildings; cleaner industrial processes and manufacturing; climate-smart agriculture and forestry; and more.” Many of these sectors are el
Article from Reason.com