Brussels is pushing for Washington to rethink “discriminatory” provisions in its new flagship green legislation, as alarm mounts among EU officials that the rules could prompt European companies to move production to the US. Margrethe Vestager, Europe’s competition enforcer, said Brussels wants to use a meeting of the transatlantic Trade and Technology Council (TTC) in December as a vehicle to address a brewing dispute over America’s new rules contained in its Inflation Reduction Act, which became law in August. The hope, she told the Financial Times, was that this strategy would yield quicker results than legal action through the World Trade Organization.
“As a matter of principle, you should not put this up against friends,” Vestager said of provisions in America’s new Inflation Reduction Act that offer substantial incentives to bolster domestic production of electric cars and other green technologies. “You have what we see as an unbalanced subsidy.”
EU officials are concerned that the policies in the Inflation Reduction Act discriminate unfairly against electric vehicles produced outside of the US, amounting to a breach of WTO rules. The act includes tax credits for electric vehicles made in North America as well as provisions seeking to boost the US battery supply chain and its renewable power sector.