The European Union has come out against Joe Biden's proposal to provide financial incentives for the purchase of electric automobiles manufactured in North America. The political and economic might of Beijing may be seen in the backdrop.
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| [Electric car sales of China, USA and EU countries] |
The time of Donald Trump and the wars fought over aircraft and steel seemed to be a thing of the past at this point. However, the hurried shift to a more environmentally friendly economy and the need to lessen reliance on China have revived the trade conflict along the transatlantic axis. The Inflation Reduction Act, Washington's $ 370 billion mega investment plan that gives direct subsidies to US enterprises participating in the green industry, is the policy that creates a split between the United States and the European Union. And which offers financial incentives to consumers who purchase electric cars produced in the United States solely.
These are considered "discriminatory measures" by the EU states, in particular with regard to European automobile makers. "I will not sugarcoat it: the European Union cannot tolerate it. This document, in its current form, displays a high degree of protectionism, which is to the harm of European exports. This aspect requires further elaboration ", emphasized Jozef Sikela, the Minister of Industry and Trade of the Czech Republic, which is the country that currently holds the rotating presidency of the Union. The informal Trade Council was held in Prague, and the United States Trade Representative, Kathrine Tai, was also present there as a guest.
The incentive, which may be as much as $7,500, is being held back for people who are interested in purchasing a new electric vehicle. This has particularly enraged the Twenty-seven. The customer must purchase a car that was meticulously put together in North America and that has a battery that has a particular amount of metals that were either mined or recycled in the United States, Canada, or Mexico in order to qualify for it. In point of fact, automobiles manufactured in the European Union or Asia are not eligible for the incentive.
"It is an issue that is of concern to a great number of nations as well as businesses, one that I have brought up with our partners in the United States over the last several weeks, and one that has been at the center of today's conversations. It would seem that a significant number of the legally needed green subsidies may be discriminatory against some companies. "EU in the energy-intensive sectors, including the automotive, renewable energy, and battery industries." ", as verified by Valdis Dombrovskis, the vice president of the European Commission who is in charge of the commission's foreign trade responsibilities.
The European Union (EU) has established a task group that is scheduled to meet in the next days in order to prepare for the possibility of the United States engaging in yet another round of tug-of-war at the World Trade Organization (WTO). However, it seems that internal conflicts in Brussels weigh more heavily on China than those that are directed at the United States. The stone guest of the transatlantic tensions is Beijing, and this is despite the initiatives of Joe Biden, who is seeking to reestablish consensus in front of the midterm elections.
At a time when manufacturers in the EU are struggling to deliver cars to their customers due to problems in the supply chain of essential components, such as microchips or the batteries themselves, China has begun shipping its electric car models to the European market at prices that are more than competitive. This comes at a time when China has begun shipping its electric car models to the European market. The Stellantis group has proposed increasing tariffs on imports of Chinese automobiles as a means of putting a stop to this invasion. However, the major German automobile producers (ranging from Volkswagen to Mercedes-Benz and BMW) are concerned about the potential for commercial retaliation from Beijing, which could put a damper on their production. heavy reliance on components that were produced in China (like Tesla for that matter).
Emmanuel Macron would want to pack a tougher punch, even against the protectionist measures taken by the United States, and he has worried the potential of a Buy European Act, which is a European legislation that encourages the purchase of products that are manufactured in the country where the law is enacted. Olaf Scholz, the Chancellor of Germany, did not make any comments on the concept that was proposed by his French colleague; but, in Berlin, they do not rule out the possibility that they would engage in a trade war with the United States under Trump's administration.