European business groups attack US over latest green investment move
European business groups and lawmakers have attacked the White House after it announced new measures aimed at boosting investment in domestic green technology.
Support for American-made electric vehicle chargers, unveiled by the government on Wednesday, comes after the US approved the $369 billion tech in August.
“Our most important trading partner decides in its own interest,” said Luisa Santos, Deputy Director General of BusinessEurope, which represents companies across the EU. “You keep doing it. But they want us to support them in China.”
A spokesman for DigitalEurope, which represents the continent’s tech sector, described the recent support as “like Déjà-vu“. Cecilia Bonefeld-Dahl, Director General, said: “The path to achieving our common climate goal does not lead through more ‘Buy American’, but through joint action and common standards.”
The European Commission announced that it would seek talks with the US about the subsidies. “We must look for synergies and work to avoid trade barriers in the transatlantic relationship,” a spokesman for the commission said last week. “We will continue to raise concerns about discrimination or local content requirements with our US counterparts.”
The latest package, part of the U.S. Infrastructure Act, sees the U.S. government spending $7.5 billion on electric vehicle charging, $10 billion on clean transportation, and more than $7 billion on… battery components, critical minerals and raw materials for electric vehicles.
The White House last week described the support as “a tool to encourage domestic manufacturing.” To qualify, products must be at least 55 percent domestically manufactured starting next year.
While business groups and lawmakers have attacked Washington’s repeated reluctance to consult with its major trading partners on green subsidies, European companies with large US businesses have welcomed the additional support.
Switzerland-based technology company ABB, which is one of Europe’s leading manufacturers of electric vehicle chargers and counts the US as its largest market, said the measures were “beneficial as expected”.
“With our new manufacturing facilities in South Carolina and our focus on the U.S. market, we look forward to continuing to work with our partners and federal and state governments to deploy reliable, high-quality public chargers,” said a spokesman for the group.
German chemicals maker BASF, which employs more than 16,000 people at more than 150 sites in North America, said it would “look at what opportunities exist under the IRA and the Infrastructure Act.”
“Such incentives can help support the further development of electric mobility in the United States and North America and otherwise help reduce emissions in the transport sector,” said a spokesman.
The Commission and the White House have set up a task force to find ways to implement the Anti-Inflation Act to allow for better treatment of EU manufacturers. But in the face of opposition from the US Congress, it has made little headway as Brussels instead allows member states to subsidize domestic clean tech industries by relaxing state aid rules.
Brussels has already threatened to complain to the World Trade Organization (WTO) over the anti-inflation law, whose rules prohibit tying state support to domestic production. Officials have also claimed the US is trying to lure companies away from the EU. BASF has announced that it will make approximately 15 percent of its investments in North America over the next four years.
The US’s latest move also raises questions about the Trade and Technology Council, a forum set up 18 months ago to harmonize transatlantic rules.
The forum achieved little, despite being chaired on the US side by Commerce Secretary Gina Raimondo, Secretary of State Antony Blinken and Trade Representative Katherine Tai, and EU Trade and Competition Commissioners Valdis Dombrovskis and Margrethe Vestager.
“The EU and the US should work together to promote resilient supply chains and support the transition to low-carbon economies on both sides of the Atlantic,” the commission said last week. “This is one of the main purposes of our cooperation with the US under the TTC.”
Ahead of the White House announcement this week, both sides said they are preparing a joint recommendation for federally funded electric vehicle charging networks and a common standard for truck chargers. Officials say they want to prevent China, the biggest market for electric vehicles, from setting global standards.
Corporate groups would also like the TTC to play a greater role in shaping trade relations.
“We have the forum to discuss these issues and coordinate with allies – the TTC,” said a spokesman for DigitalEurope. “Let’s use it or lose it.”
“The TTC needs to be at a higher political level,” Santos said. “Do it [US] President understands the logic behind this, that it should not be a discussion forum, but a place to discuss the implications of US actions for Europe?”