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The European Union should simplify its state aid rules to counter the threat of unfair competition posed by the Inflation Reduction Act: the $369 billion package to reduce the US deficit and boost clean energy production. This was stated by the President of the European Commission, Ursula von der Leyen an intervention at the Collège d’Europe in Brugesin Belgium.
The American measure, von der Leyen said, could create “unfair competition” between the two sides of the Atlantic, “close the markets” and “fragment distribution chains already tested by Covid”. Brussels’ role is to “both fulfill its domestic responsibilities and work with the US to mitigate competitive disadvantages.” Washington’s industrial policy requires an “appropriate response,” von der Leyen said, beginning with alignment with European rules to “facilitate public investment.”
Tensions surrounding the US “anti-inflation law”.
The package launched by the US government has sparked friction between the two sides of the Atlantic, ending up on the table in the White House confrontation between US President Joe Biden and his French counterpart Emmanuel Macron. The EU fears that US legislation, which relies on relief and subsidies for the green economy, will distort competition and trigger a flight of investments from the EU market to the American one.
The same biden he called for the package, saying he didn’t have to “apologize” for the text, although he was open to some corrections and trying to avoid an open conflict with Brussels. Von der Leyen is calling for EU action to balance ties in the form of a review of state aid to facilitate public investment, a recalibration of green technology funding and working with the US to address some of the “more worrying” aspects of the law American. However, von der Leyen specified that a trade war “is not in our interest. Not in the interest of the Americans.”
Von der Leyen, found the US-EU Anti-China Club on Commodities
Von der Leyen also called for an agreement with the US to set up a commodities “club”. The aim is to undermine the Chinese monopoly in this sector and form a common front with Beijing. “Today, the production and processing of some of the raw materials crucial to the green revolution are controlled by a single country, China,” he said. “Europe and the United States can build an alternative to this monopoly by creating a materials club,” he said . The idea behind it is simple: working together with partners and allies for sourcing, production and processing gives us the opportunity to break the monopoly».