Es has something of disappointed love. “In the current geopolitical situation and with our common climate protection goals, we should form alliances instead of risking conflicts,” implored Trade Commissioner Valdis Dombrovskis on Thursday in the European Parliament. On the agenda: the gigantic American subsidy package for green technologies, the Inflation Reduction Act. Dombrovskis added that the fact that the USA ties the aid to the fact that the preliminary products come from there and that the products are assembled in America is probably aimed at China. But the EU pays the price.
She has to watch as companies follow the money and shift their investments to the US, where to make matters worse, energy costs are much lower. At the beginning of the week, after the most recent meeting of the European-American Trade and Technology Council (TTC) in Washington, Dombrovskis therefore gave the USA a small ultimatum. A solution must be found by the end of the year.
Not that the US cares about ultimatums. Your political leadership is soulful. Ronald Klain, President Joe Biden’s chief strategist and chief of staff, celebrates almost every day on Twitter: falling prices for gasoline, for used cars or medicine, the opening of new microchip factories and a hardly expected success in the midterm elections.
Confirmation for Biden
Biden’s team feels confirmed in the realignment of industrial policy. The Americans are investing 369 billion dollars in green future technologies with the Inflation Reduction Act, or IRA for short. With a total of $3.5 trillion, the White House wants to strengthen industrial capacity. The majority is private capital. Tax credits are intended to encourage investment.
It is a reaction: to the fact that deindustrialization has impoverished regions and fostered inequality. That climate change must be combated. That China must be kept in check technologically, economically and militarily. That globalization has been pushed too far when the supply of important goods is not guaranteed. So young industries have to be promoted and protected – with a combination of subsidies and protectionism.
The task is enormous. “We’re talking about 950 million solar panels and 120,000 wind turbines by the end of this decade, billions of devices with microprocessors, millions of electric vehicles, thousands of miles of fiber optic cable and transmission lines,” says Brian Deese, Biden’s economic adviser. Given the magnitude of the task, concerns expressed by transatlantic friends about protectionist accents seem petty. “They don’t understand why we criticize them, we should be happy that they are finally investing in climate protection,” says Dutch MEP Catharina Rinzema. She just met with Democratic US lawmakers in Washington.