Source: People's Daily Overseas Edition
Recently, the leaders of nine EU countries, including Spain, France, Italy, Portugal, Greece, Croatia, Slovenia, Malta and Cyprus, met in Spain and asked the European Commission to respond to the US government's Inflation Reduction Act. Previously, French President Emmanuel Macron also expressed dissatisfaction with the Inflation Reduction Act during his state visit to the United States.
Expert analysis believes that the collective voice of many European countries shows that the US trade protectionist behavior has further deepened the rift between the United States and Europe.
Damage to Orime
According to Spain's "El País", the leaders of Spain, France, Italy and other 9 EU countries recently met and issued a communiqué calling for a "European way" to deal with many challenges such as the US Inflation Reduction Act. European countries believe that the US Inflation Reduction Act is a protectionist policy that harms the development of European industries. French President Emmanuel Macron, who visited the United States in early December, was particularly tough. He made it clear at the meeting that all countries agreed on the need for a "strong response" to U.S. legislation and gave a specific timeline: the first quarter of next year.
In August this year, US President Joe Biden signed the Inflation Reduction Act passed by Congress, completing the legislative process. Under the bill, the U.S. government would provide high subsidies for green industries that are completed in the United States, the main production process. The US claims that the bill aims to ease inflation and reduce the deficit. In this regard, European countries have expressed dissatisfaction, accusing the bill of containing trade protectionist policies, intended to encourage domestic and overseas companies to transfer production bases to the United States, the essence of which is to damage European industry and strive for competitive advantages for American companies.
In late November, on the eve of Macron's visit to the United States, French officials said that Macron intended to "confront Biden" with Biden about the discriminatory subsidies contained in the US Inflation Reduction Act. On subsequent trips to the United States, Macron criticized the bill on several occasions, warning that it could lead to "the division of the Western world."
After his talks with Macron, Biden stressed that the US side is not aimed at excluding Europe from relevant trade. White House press secretary Karina Jean-Pierre argued that the U.S. push for green industries "represents a huge opportunity for European companies and good for European energy security."
However, European countries do not think so. Recently, in addition to the collective demand of many European countries to counter the US "Inflation Reduction Act", a number of EU officials have also spoken out one after another.
German media reported that Bernd Lange, chairman of the International Trade Commission of the European Parliament, called on the European Union to file a complaint with the World Trade Organization over the US Inflation Reduction Act. He said the relevant content of the Inflation Reduction Act was inconsistent with World Trade Organization rules and that negotiations between the EU and the United States would not resolve the dispute.
European Council President Michel also believes that the United States is an energy exporter that can benefit from soaring gas and oil prices, while the EU has to pay a heavy price and face the risk of recession. European industry pays more for energy and faces industrial competition from the United States. He hoped that the United States would take a different approach.
Kick you when you're down
"It is a relatively rare situation for many European countries to collectively demand a counterattack against the US Inflation Reduction Act." Zhao Ke, associate professor of the International Strategic Studies Institute of the Party School of the Central Committee of the Communist Party of China, analyzed in an interview with this reporter that there are three main reasons why the bill has aroused such strong opposition from European countries: First, the trade and investment relationship between the United States and Europe is very close, and although the "Inflation Reduction Act" aims to promote the domestic economy of the United States, its impact will definitely affect Europe; Second, European countries are worried that the bill distorts the market, making companies make decisions to invest in the United States under the stimulation of non-market factors, so that European interests will be damaged; Third, the bill reflects the consistent selfish characteristics of the United States, based on the huge economic size of the United States and its important position in the international economic pattern, the domestic economic policy of the United States is bound to have a systemic impact on the global scale, but the United States often does not consider its own international responsibilities when formulating domestic policies, and this is also the case.
According to an article on the website of the French weekly "Viewpoint", after the escalation of the Ukrainian crisis, the United States sat on the profit, had autonomy in energy, and dominated the field of technology and armaments. Europe, on the other hand, has not only been hit by the energy crisis by following US sanctions against Russia, but the European Central Bank is also in trouble under the pressure of the Federal Reserve's sharp interest rate hikes. Under the impact of multiple crises, Europe is facing a major threat to the flow of industry, jobs, and capital to the United States.
The German Chamber of Commerce and Industry recently released information that investment in the United States is becoming more and more attractive to German companies, and the important reason is the subsidies and discriminatory measures introduced by the US government. According to the agency's findings, 39 percent of its member companies plan to increase investment in the U.S. in the coming months, and one in five companies in Germany's automotive supply industry plans to set up production plants abroad.
The Financial Times website also reported that France will lose an estimated 8 billion euros as some companies move production to the United States due to the US subsidy policy.
"These subsidies are protectionism, and the Americans have stabbed us in the back." Olivier Yoris, head of EU affairs at the Federation of Belgian Enterprises, said.
"In the context of the current heightened risk of global recession, especially soaring energy prices, many European companies have already considered moving their factories to the United States in order to save costs. The Inflation Reduction Act further provides incentives for companies in new energy and other fields to set up factories in the United States, which will trigger a manufacturing siphon effect and exacerbate the concerns of European countries. Wei Zongyou, a professor at the Center for American Studies at Fudan University, told this reporter that it can be seen that although the Biden administration claims to attach importance to allies and intends to improve the international image of the United States, its economic policy has not actually deviated from the "America First" idea proposed by the previous administration, and still has obvious populist tendencies. This kind of behavior of taking advantage of the danger and exploiting allies has triggered a strong backlash from European countries.
Deepening the rift
On December 5, the US-EU Trade and Technology Committee held its third ministerial meeting, and the discussion between the two sides on the green subsidy provisions of the US Inflation Reduction Act became a hot topic of public opinion. A joint statement issued after the meeting said the work of the U.S.-EU working group set up to resolve the green subsidies dispute had "made initial progress." Reuters revealed that the working group seeks to reach an agreement before some of the measures contained in the Inflation Reduction Act take effect early next year.
During Macron's visit to the United States, Biden also said that the Inflation Reduction Act could be "fine-tuned" to take care of the interests of European companies. However, the analysis generally believes that according to the current situation, the so-called "fine-tuning" will be "extremely difficult".
"The US Inflation Reduction Act has been passed by Congress and completed the legislative process, and it is very difficult to adjust or modify it." Given the strong grievances in European countries, Wei believes that the United States is more likely to resort to other remedies, such as some form of exemption or subsidy for European companies, to appease allies and repair relations.
At present, European countries are increasingly calling for measures to counter the United States. France's "Le Monde" recently published an editorial saying that European countries have reason to protest this protectionist behavior of the United States, which blatantly violates the rules of the World Trade Organization.
Zhao Ke believes that the US "Inflation Reduction Act" has further deepened the rift between the United States and Europe while impacting the economies of European countries. "Affected by the Ukraine crisis, the business environment of European countries has seriously deteriorated, and the bill is tantamount to making things worse, and has a huge psychological impact on European countries, making them more aware of the essence of the United States abandoning morality and rules for its own selfish interests."
"On the one hand, the US government accuses other countries of subsidizing related industries, and on the other hand, it introduces the Inflation Reduction Act to support the clean energy industry through government subsidies, which is actually an unfair competition." As European officials say, the actions of the United States have in fact led the way in launching a "subsidy war" that could have global repercussions if other countries follow suit. Wei Zongyou said.
Of course, European countries also understand that the current economic problems facing Europe are not only caused by the US Inflation Reduction Act. In order to truly get rid of the current economic difficulties, Europe must also tap its internal potential, increase investment in the two major development strategies of green transformation and digitalization, and continue to deepen the construction of the European common market, so that future economic growth can gain greater impetus. Zhao Ke said. (Reporter Yan Yu)
People's Daily Overseas Edition (Version 06, December 17, 2022)