The visits French Economy Minister Bruno Le Maire and his German counterpart Robert Habeck paid to the United States earlier this week were another appeal to the US administration to skip the articles in the Inflation Reduction Act that harm the interests of Europe’s green industry.
The act, with the majority of the $370 billion government fund it involves going to companies investing in clean energy in the US in the form of tax cuts and subsidies, has irked almost all major players in the green industry, including the European Union, the Republic of Korea, India and Japan, as it openly tilts the playing field of the industry to the US by means of excessive government interference.
The fear of it sucking businesses from the European Union to the US prompted French President Emmanuel Macron to pay a visit to the US in December last year with the intention of getting the Joe Biden administration to halt the act.
But the French president failed in that endeavor, which spurred the European Union to propose its own version of the act, the Green Deal Industrial Plan on Feb 1.
Under the plan, €250 billion ($272 billion) is to be made available to new energy enterprises in the EU to counter the influence of the US act on EU businesses.
The visits of Le Maire and Habeck to the US were reportedly the bloc’s last shot at convincing the US to have second thoughts about its subsidies before implementing the plan. It will not be easy for either side to come up with that much money in a short time without raising inflation further.
High inflation and the shortage of labor are two major concerns of both the EU and the US. Yet the large-scale subsidies they are proposing will undoubtedly further aggravate both.
Nonetheless, the US is trying to persuade the EU to accept the Inflation Reduction Act by blaming its necessity on China. After her talks with Le Maire and Habeck on Wednesday, US Treasury Secretary Janet Yellen encouraged the EU to introduce the subsidies at an early date, saying that the US and EU subsidies would end the two sides’ dependency on China for green products.
This is the first time that the Joe Biden administration has openly tried to steer the EU’s discontent with the act toward China. But its reason for doing so is clear. It wants to cover up the distorting nature of its selfish and shortsighted act, which leaves the EU and other parties no choice but to follow suit, and scapegoat China for it.
In doing so, the US is intent on forming a green club so it can redefine the game rules of the green industry and technology and weaponize the sector and climate issues. If unchecked, green products and technology will become geopolitical tools of the West.
Editorial, China Daily