France’s Bruno Le Maire and Germany’s Robert Habeck are due to press concerns in Washington about tax credits under the United States’ Inflation Reduction Act that subsidises products from electric cars to solar panels as long as they meet requirements on being locally produced.
The two are due to meet White House officials on Tuesday in addition to Treasury Secretary Janet Yellen, Trade Representative Katherine Tai and Commerce Secretary Gina Raimondo, the officials from France’s economy ministry said.
EU governments are worried the tax credits not only put European producers at an unfair disadvantage but could be actively used to lure investment away from Europe to the United States.
“One of the ministers’ messages will be to not approach European companies about moving plants to the U.S. There will be enough room for everyone to invest both in Europe and the U.S.,” one official said. The second official said the aim was to avoid “aggressive pitches” to EU firms to invest in the United States.
The first official said there was little scope for new concessions from Washington for better treatment of EU companies after the European Commission already secured a partial win on electric vehicles built outside North America qualifying for tax credits if leased by consumers.
Nonetheless, the ministers are hoping to convince U.S. officials to allow more leniency over local production requirements for critical materials used in electric vehicle batteries, the first official said.
They will also seek a U.S. commitment to be transparent about subsidies companies receive under the Inflation Reduction Act, both officials said.
That is key because it could determine how much state support European companies can receive under a European Commission proposal to allow third-country subsidies to be matched in Europe.
Source: Economy - investing.com
