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Controversy over US subsidies: No deal between EU and US

Controversy over US subsidies: No deal between EU and US

A meeting of representatives of the European Union and Washington largely failed in the dispute over a multibillion-dollar climate and social package in the United States. However, after a meeting of the Joint Trade and Technology Council at the University of Maryland yesterday, Vice President Valdis Dombrovskis expressed cautious optimism: “We’re leaving this meeting a little more optimistic than we started.”

“The bottom line is: We are committed to moving forward together, not at each other’s expense, but for each other’s benefit,” said US Secretary of State Anthony Blinken.

Strong European concerns about US subsidies included in the package were discussed at the meeting. On the US side, Secretary of State Blinken, Commerce Secretary Gina Raimondo and Trade Representative Kathryn Doi attended. EU Commission Vice-Presidents Margrethe Vestager and Valdis Dombrovskis represented the EU.

The European Union hopes to collapse

The controversy revolves around US President Joe Biden’s Inflationary Reduction Act (IRA). It provides $370 billion (about 357 billion euros) for climate protection and energy security – including subsidies for electric cars, batteries and “made in America” ​​renewable energy projects. Disadvantages for local economic sectors are feared in the EU.

“We recognize the EU’s concerns and underline our efforts to address them constructively,” the US said after the meeting. An EU official admitted that changing the US law would be “very difficult”. However, something more can be done with “activation”. On the US side, there is a “willingness to take our concerns into account without going on a confrontational course”. Nevertheless, the EU expects a “very firm response”.

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