Dec 22, 2022
It was the opening shot of what the Wall Street Journal’s (WSJ) editorial board fears may become a protracted climate trade war between the European Union (EU) and the United States. In a notorious departure from standard EU lip service to free trade, late last week French President Emmanuel Macron urged fellow European leaders anew to match the Biden administration’s round of green subsidies pork-barrelled into the Inflation Reduction Act. Unhelpfully acronymized as IRA, that legislative package was signed into law in August. As part of it, the US Treasury will be offering tax breaks and other market-rigging subsidies to companies manufacturing electric vehicles in the US, which Macron fears will unfairly disadvantage their European competitors. Macron claims there should be greater joint efforts to accelerate the green transition. In this latest episode with The Economist’s Charlemagne columnist, Stanley Pignal, and POLITICO’s Barbara Moens, we inquire whether the EU was really as committed to free trade as its liberal cheerleaders claim in the first place, and whether this latest round of rhetorical animus may spark a real trade war between transatlantic allies.
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