EU Official Says They Don't Want an IRA Trade War
European Commissioner for Competition Margrethe Vestager told reporters that a trade war over America's Inflation Reduction Act's discrimination against European production of EVs and EV batteries is not where Europe wants to go.
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Vestager, who held a press conference Dec. 6 at the EU embassy in Washington, said, "I think one war is enough." She said that Russia's invasion of Ukraine absorbs the EU's attention, given the suffering in Ukraine, the millions of refugees in Europe, and the impact on European countries' power and heating capacity.
She added, "It's much faster to find solutions than to deepen a conflict." She said conflicts last a long time, and nothing is provided to the companies who are aggrieved by the trading partner's actions.
She said the EU-U.S. task force on the Inflation Reduction Act will need to hammer out the details of how to tweak the U.S. approach so that it doesn't draw away factories that make wind turbines, electric vehicle batteries, solar panels or other goods needed for the green transition.
She said that if large European companies decide to establish plants in the U.S. because of generous subsidies, rather than Europe, there's a risk that the smaller European companies that had supplied them when they built these goods in Europe get cut out of the supply chain.
"One of the reasons I have a sense of comfort is because we have solved very difficult things before," she said. "We have moved the needle in order to get closer to a solution."
When asked about the element of the joint statement that said the EU and U.S. will analyze the impact to their medical device industries from imports that were produced by non-market principles, Vestager said she didn't know yet how the EU and the U.S. would coordinate a response to those imports, whether it would be countervailing duties or an outright ban on imports. Regarding a ban, she said, "That is, of course, one of the tools, but we need to agree before we go there. It is a very far-reaching place to take it, and more analysis is needed before we know if that far-reaching tool is a necessary thing to do."