MOSCOW (Pakistan Point News / Sputnik - 29th November, 2022) French President Emmanuel Macron's visit to Washington this week will be Europe's last chance to convince US President Joe Biden to relax the legislation known as the Inflation Reduction Act and avoid a trade war, the Politico newspaper reported, citing sources.
The French president will pay an official five-day visit to the United States from November 29 to December 3. A meeting between Macron and Biden is scheduled to take place in Washington on December 1.
Macron wants to know whether Biden can offer cheaper gas and provide Europe with access to the US multi-billion-dollar green industry subsidy scheme, the newspaper reported, adding that if the US president refuses to make concessions on the US inflation legislation, then "a transatlantic trade war will be more or less inevitable."
The European Union believes that the United States should show greater solidarity with Europe, which is bearing the "economic brunt" of sanctions against Russia, the report said.
"There's a risk that imbalances will worsen as the EU pays higher energy prices and the U.S. takes measures to boost investment in industry," an official at the Elysee Palace told Politico.
A key breakthrough for Macron would be that European allies could receive the same rights in subsidy deals under the Inflation Reduction Act as companies from the US, Canada and Mexico, according to the report.
Politico added, citing a high-ranked French economy ministry official, that Washington is unlikely to abandon measures to reduce inflation. In this case, the Europeans will have to choose whether to take the path of protectionism and risk engaging in a subsidy competition they cannot afford or watch the rest of the world build up protectionist walls, the report said.
The legislation, signed into law by Biden in August, commits $300 billion toward deficit reduction, in addition to providing approximately $369 billion in funding for energy security, including tax credits for US-made electric vehicles and subsidies to US consumers, and $80 billion to increase Internal Revenue Service tax enforcement and operations.
Concerns are rising in Europe that the US tax credit plan could kick off a subsidy race between the transatlantic allies at a time when they need to show unity in the face of the Ukrainian conflict. Germany and France have already suggested following the US suit with an EU subsidy regime.