In response to American government subsidies for electric vehicles that benefit local automakers, the European Union has vowed to take punitive action against the United States.
The “Inflation Reduction Act” in Washington, which would see significant investment in green energy programs and contains tax benefits for US-made electric cars and batteries, has angered the 27-nation bloc. According to Brussels, these advantages for American EV manufacturers would unfairly disadvantage EVs built in the EU on the lucrative US domestic market.
The Inflation Reduction Act makes a $7,500 tax credit available for the purchase of an electric car, but it must be produced in the US and have batteries made in the country. Because the subsidies “violate World Trade Organization standards,” Internal Market Commissioner Thierry Breton warned to take “retaliatory actions” against the US. He stated on French radio and television station BFM Business that if Washington doesn’t take into consideration the opinions of its EU allies, the group should “go to the WTO” and present its concerns there.
Bruno Le Maire, the finance minister of France, demanded that the EU respond to the US actions “coordinated, united, and strongly.” Le Maire recently stated in an interview that “certain big foreign companies that wanted to come to Europe are now hesitating and weighing their options between European and American sites.” According to early projections from the French government, investments worth 10 billion euros are at risk.
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