President Joe Biden’s Inflation Reduction Act is promising, but it is creating tension between Europe and the United States. The giant subsidy package that is supposed to create jobs in America does little for Europe. European Commission President Ursula von der Leyen will meet Biden today to calm things down.
According to US correspondent Jan Postma, much is at stake for both sides. Biden’s green measures provide Americans with a tax advantage, if they are products made in America itself. For example, the purchase of an electric car is subsidized if all the parts are made in the United States. This rule puts Europe, a major supplier of many raw materials, out of business.
However, a green trade war seems unlikely. Firstly, according to Postma, all kinds of business are closed privately. “Von der Leyen is now trying to find a way to profit from the IRA itself.” The United States is trying to conclude the same “interim agreements” with countries such as the United Kingdom and Japan.
Also, Biden cannot afford a subsidy war right now. “The EU is a key ally in the fight against Russia.” It is equally important for him to keep warm ties with Europe. Postma suspects that the president will also refer to this in his talks with Von der Leyen. “It must prevent Trumpian practices. After all, he is the international president. He will beg to form a bloc together against Russia and China.”
“It must prevent Trumpian practices. After all, he is the international president.’
Exciting game
It remains an exciting match for Biden, because bending too much with Europe can lead to criticism from his supporters. The IRA is an important job creation tool. According to Postma, however, he has no choice to somehow move with the EU: “Otherwise he will cut off his fingers.”
Source: BNR
Sharon Rock is an author and journalist who writes for 24 News Globe. She has a passion for learning about different cultures and understanding the complexities of the world. With a talent for explaining complex global issues in an accessible and engaging way, Sharon has become a respected voice in the field of world news journalism.
