Subsidies and America First vex US allies

The agenda for last week’s US-EU Trade and Technology Council meeting contained a number of items, but all were overshadowed by the unresolved issues surrounding the U.S. Inflation Reduction Act of 2022 (IRA).

As noted previously, the IRA provides some $369 billion in subsidies and tax credits for electric vehicles and batteries, with the stipulation that final assembly must take place in the U.S. and, at a future date, key battery components must also be American made. European leaders—and America’s Asian allies—have strongly condemned the subsidies and exclusionary local content restrictions in the IRA as against World Trade Organization (WTO) rules.