Germany's Finance Minister Christian Lindner said on Monday that the EU and the US need dialogue to ease trade tensions triggered by the US Inflation Reduction Act, which is threatening European businesses and industry, Reuters reported.
Linder's remarks are part of a recent backlash in the EU against the US Inflation Reduction Act. The EU has "serious concerns" about the act, saying it breaches international trade rules, according to an official document seen by CNBC.
However, despite the growing backlash, it would be naive for the EU to think that it can change the US policy tendency to protectionism through "dialogue."
In the document that will be reportedly presented to US officials, the EU listed nine of the provisions in the legislation, which restrict subsidies and tax credits to products made in the US or companies operating there. In particular, a tax credit worth $7,500 will be offered to purchases of electric vehicles that are assembled in Canada, Mexico and the US. Moreover, to qualify for the tax credit, electric carmakers must also source a significant percentage of major battery components, including metals like lithium, nickel and cobalt, from the US or countries that have free trade agreements with the US.
While the Biden administration touted the Inflation Reduction Act as efforts to boost domestic manufacturing in clean energy areas, the legislation is threatening global electric carmakers and upstream suppliers to locate plants and produce goods in the US or they will face the prospect of being shut out of the market.
Over the years, with the booming development of the global electric vehicle industry, relevant industrial chains and supply chains have been intricately intertwined among various countries. This is also why many countries only require electric vehicles to be assembled within the borders when it comes to making subsidy policy for new-energy vehicles, with no requirement for the localization of the entire supply chain.
Therefore, the US' overreach in its so-called Inflation Reduction Act in stipulating places where battery minerals and units should be processed is a clear discrimination against foreign products, a typical protectionist move. Ironically, the US often accuses China of failing to meet its free-trade commitments, even as it takes protectionist moves against foreign companies. New-energy vehicle makers in China, both domestic and foreign ones, are entitled to industry subsidies as long as they meet criteria.
Moreover, it should be noted that building barriers through subsidies will not only cause improper disruptions in the global industrial chain and supply chain of electric vehicles, but will also trigger a series of chain reactions by generating major shocks to the global economy. This is because with the US' legislation undercutting others' industries, it is possible for European and Asian countries to follow suit to roll out their own countermeasures.
For instance, the EU threatened on Monday to take retaliatory measures against the US for electric car subsidies that will put European industries at a huge disadvantage. German Chancellor Olaf Scholz warned last month that the US' measures could trigger "a huge tariff war," the Radio France International reported. This means that the US' Inflation Reduction Act has the potential to trigger a trade war between the US and the EU, with more discriminatory trade measures to be issued by the two sides if Europe's concerns are not addressed. Against the backdrop of a global economic slowdown, such prospects seem all the more likely.
Indeed, not only the EU but also Asian economies like South Korea and Japan will be drawn into a dangerous trade confrontation to protect their interests from US protectionism. Japan and South Korea - both are important players in the industrial chain - have expressed concerns about the US' unfair subsidy policy. China is also a major producer of electric vehicles.
The US government has made the reshoring of manufacturing an important part of its economic policy in recent years. In the past, it tried to mainly target Chinese manufacturing to achieve the goals. But now the Biden administration's new legislation lays bare the fact that the US doesn't care whether manufacturing jobs will flow back to the US from China or from Europe and whether it will have a devastating impact on free trade and the global industrial and supply chains. In this sense, the US Inflation Reduction Act is dragging the global economy and trade into the abyss.
Mohsen Rezaee, a member of the Expediency Discernment Council, has said preconditions include reparations and security guarantees
For the ongoing conflict between Iran and the US to conclude, the latter must withdraw its military forces from the Persian Gulf, according to a member of the advisory board of Iran’s supreme leader.
Mohsen Rezaee, a retired major general and former commander of the Islamic Revolutionary Guard Corps (IRGC), added that Tehran would also seek full restitution for the damage done and ironclad security guarantees from Washington.
In an interview with Iran’s SNN TV broadcaster published on Saturday, the member of the Expediency Discernment Council said that the “presence of the US in the Persian Gulf has been the main cause of insecurity over the past 50 years.”
“The end of the war is also in our hands,” Rezaee claimed, naming the “US withdrawal from the Persian Gulf” among the key prerequisites. Additionally, Iran expects to receive reparations from the ...
The spokesman for the Khatam al-Anbiya Central Headquarters has accused the United States and Israel of deploying a rebranded copy of Iran’s Shahed-136 drone, designated “Lucas,” to carry out attacks on civilian infrastructure in regional countries as part of a deliberate false-flag operation aimed at framing the Islamic Republic.
In an official statement released today, the spokesman explained that after suffering military setbacks on the battlefield and failing to build political coalitions against Iran, the enemy has resorted to deception.
The statement specifically warned that the objective of these operations is to “create doubt and accuse the Islamic Republic of Iran” while sowing discord between Tehran and its neighbors, thereby undermining the legitimacy of Iran’s defensive actions.
The spokesman pointed to a series of “suspicious attacks” in recent days on facilities in friendly neighboring countries, including Turkey, Kuwait, and Iraq, which Western media outlets and hostile ...
The Islamic Revolution Guards Corps (IRGC) has announced the execution of the 51st wave of Operation True Promise 4, launching missile strikes against US military installations across the region in retaliation for ongoing American-Israeli aggression against the country.
The IRGC announced the latest wave was carried out using a combination of liquid-fuel and solid-fuel missiles against US terrorist army forces at the Al Kharj Air Base in Saudi Arabia.
According to the IRGC statement, Al Kharj base served as the "origin of aggressions against the Islamic homeland," functioning as the staging ground for US F-35 and F-16 fighter jets involved in attacks on Iran.
The base also houses fuel supply aircraft and serves as the main hub for American AWACS surveillance planes.
Concurrently, the spokesman for the Khatam al-Anbiya Central Headquarters confirmed that the fiftieth wave of the operation struck multiple US terrorist army bases.
They include the Al Dhafra Air Base and Fujairah in the UAE, Jufair in ...
