European Union officials intend to complain to their US counterparts at a trade meeting on Monday about the exclusion of electric vehicles from the bloc from tax breaks under the signed climate law by US President Joe Biden.
The US-EU Trade and Technology Council (TTC), a year-old transatlantic forum for dialogue, has focused its first two meetings on regulatory cooperation and present a united front against China’s anti-market economic practices.
However, the 27-nation bloc fears that the $430 billion Reduced Inflation Act, with its generous $7,500 tax credits for Tesla, Ford and other American-made electric vehicles, will do a significant disservice to European car manufacturers.
This issue is on the agenda of the TTC meeting on the University of Maryland campus in College Park, Maryland, according to US and EU officials.
Participants included US Secretary of State Antony Blinken, Secretary of Commerce Gina Raimondo, US Trade Representative Katherine Tai, and Executive Vice Presidents of the European Commission Valdis Dombrovskis and Margrethe Vestager.
In a draft joint statement to be released on Monday, both sides will say: “We acknowledge the concerns of the European Union and underline our commitment to address them constructively.”
The draft document, seen by Reuters and which can still be reviewed, does not set out specific steps to resolve the dispute.
“The Inflation Reduction Act will be part of the spectrum of discussions on trade,” a spokesman for the White House National Security Council said in a statement.
The US side was “committed to further understanding the EU’s concerns” through a newly created working group, the spokesman added.
The meeting would produce a “joint roadmap” on the assessment and measurement of trusted artificial intelligence technologies, as well as a working group to reduce research barriers related to the science and technology of quantum computing, said the spokesman.
European and South Korean representatives criticized the Inflation Law at the G20 Summit in Indonesia last month. During his state visit to Washington last week, French President Emmanuel Macron told CBS that he was a “job killer” for Europe.
Biden told Macron in Washington that there could be “adjustments” in the law to facilitate the participation of European countries in the credits.
French officials say they are hopeful that an executive order from the White House could give European countries a breather, without needing to seek congressional reviews, something the White House wants to avoid.