- US-EU Trade War Looms as MEPs Roll Out ‘Nuclear Option’ Hard Line Against Washington
European nations, already battered by a self-inflicted energy crisis foisted upon them by Brussels bureaucrats’ push to wean the region off Russian oil and gas, now face the prospect of deindustrialization and impoverishment thanks to a US law encouraging European companies to move production to the United States.
The European Union mustn’t back down from defending its economic interests against US legislation which threatens to gut the bloc’s manufacturing base, European lawmakers have urged.
The Inflation Reduction Act, signed into law by US President Joe Biden in August, commits over $390 billion for energy security and climate change, including tax credits for electric vehicles, batteries and renewable energy projects made in the USA, other subsidies for manufacturers, plus tens of billions of dollars for upgrades to solar and nuclear power capacity, and home energy efficiency. It also includes $57 billion in subsidies for advanced manufacturing and “climate smart” farming projects.
But the legislation has sparked an uproar across the Atlantic, with observers seeing it as a maneuver designed to “suck investment out of Europe,” and French President Emmanuel Macron attacking it as a “super-aggressive” step which “will split the West” if changes are not made to account for European interests.
Markus Ferber, a member of the European Parliament and economic policy spokesman for the European People’s Party group, the legislature’s largest bloc, called for a hard line to show Washington that the EU is serious.
The European Commission must “put all the instruments of torture on the table” to signal that it is ready to activate defensive trade instruments,” Ferber told German media on Saturday.
“That would certainly be the nuclear option, and in the current situation it would be anything but desirable,” the lawmaker stressed. However, it would be justified, given President Biden’s protectionist course. “The American anti-inflation law threatens to make a difficult economic situation in Europe even worse,” Ferber said.