EU worried about potential new trade barriers on European electric vehicle producers

The sweeping tax, health and climate bill was approved by U.S. lawmakers back in August and includes a record $369 billion in spending on climate and energy policies. The landmark package comprises tax credits for electric cars made in North America and supports U.S. battery supply chains.

The European Union has “serious concerns” about the U.S. Inflation Reduction Act, saying it breaches international trade rules, according to an official document seen by CNBC.

In essence, the EU is worried about potential new trade barriers on European electric vehicle producers. And they are not the only ones, South Korea, for instance, has also brought up the same concern.

Ngozi Okonjo-Iweala, the director general of the World Trade Organization, said Monday that countries need to be “very careful that whatever policies are taking should not be discriminatory, should not favour domestic goods.”

EU Protests Biden’s ‘Inflation Reduction Act’

The European Commission has sent a letter to the United States, demanding changes to the Biden administration’s Inflation Reduction Act, citing violations of World Trade Organization principles.

Specifically, European officials pointed to Washington planning to spend $369 billion in subsidies and tax credits for American producers and consumers.

According to the EU, the move would violate WTO competition rules, creating a “race to the bottom” on clean energy incentives, and could lead to retaliation.

#EU #US #politics

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