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The economic standoff between the United States and China has put Europe in the crosshairs, while the US “Inflation Act” plan to boost green industries threatens to cause collateral damage to a key ally.
This American plan will be on the list of French and German Economy Ministers Bruno Le Maire and Robert Habeck’s visit to Washington the day after tomorrow, Tuesday, before the European Union prepares its response to this plan, on the occasion of a summit of the bloc’s heads of state and government on February 9 and 10.
The “Inflation Reduction Act”, for which $430 billion was allocated, provides for subsidies for green industries such as manufacturers of electric car batteries and solar panels, similar to the Chinese model of subsidies on its soil, provided that the companies manufacture these products in the United States.
“One of the main goals of the US law to reduce inflation is to exclude Chinese suppliers from clean energy production chains,” said Tobias Gerke, a researcher at the European Council on International Relations. dependence on China.
China is a major player in the electric vehicle sector with control of 78% of global production of battery cells and three-quarters of the largest lithium-ion battery factories, according to a study by the Brookings Institution in Washington.
“Europe has kind of become a victim” in this effort to reduce dependence on China, Cecilia Malmström, a former European trade commissioner who is now a member of the Peterson Institute think tank in Washington, told AFP. “I don’t think it was intended to target the Europeans.”
The fierce confrontation began on the economic and technological levels since the arrival of Donald Trump to the White House.
John Bateman of the Carnegie Endowment Center for International Peace, a think-tank, wrote in Foreign Policy that the Americans would seek to “slow China’s technological boom at any cost.”
This global priority raises fears of a race for aid in the United States and China, as well as in Europe, where the commission wants to facilitate the distribution of state aid in response to the policies of its competitors.
Pascal Lamy, former director-general of the World Trade Organization, said Europe should put pressure on Washington because the plan is more anti-European than anti-Chinese. (AFP)
