Europe-USA, high tension on trade
After the handshakes, the smiles and photo opportunities of Bali, at the G20, what seems to be an open secret is now emerging: the United States and the European Union they are not as firmly aligned as they are led to believe. At least on the commercial front, but with repercussions that could also overflow on the political and geopolitical front. On the other hand, already at the G20 it clearly emerged that Europe couldn’t wait to be able to re-establish contacts with China, which Washington instead tried to isolate for a long time. At least since 2020.
Indeed, even earlier, with the visit of Chancellor Olaf Scholz to Beijing before the Indonesian summit. That very visit by Scholz had created disagreements with the French president Emmanuel Macron. Now, however, it all seems forgotten. Also because the two big Europeans have understood that they are faced with a situation which, although not sought, is somehow having a much less impact on the USA than it is doing on Europe itself. Starting from its main economies and political guides.
These days high-level bilateral ministerial meetings have been held in Paris. Macron received at the Elysée, among others, Foreign Minister Annalena Baerbock and Economy Minister Robert Habeck. At the end, the two sides announced they would push for more assertive industrial policies, such as increased state subsidies for European companies, to counter the threat of US reforms that risk unleashing a transatlantic trade war.
The disappointment of Paris and Berlin on Biden
In a joint statement in which recent frictions are effectively set aside, Paris and Berlin promise to “explore the possibilities of industrial policy” to safeguard European industries from the discriminatory trade measures of the major global powers. Not only China but also the USA. There were great hopes that Biden, after Trump, could relaunch relations not only on a political-ideological level but also and above all on a commercial level. But even the Democratic president confirmed America First in practice, at least from an economic point of view.
Paris and Berlin are increasingly frustrated that the White House is showing little interest in addressing their concerns on the Inflation Reduction Act, a $369 billion package of subsidies and tax breaks to boost America’s green businesses. From a European point of view, the American law is a protectionist measure because it encourages companies to shift investments from Europe and incentivizes customers to “buy American” when it comes to buying an electric vehicle.
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