Henrike Hahn, Member of the European Parliament (The Greens/EFA), deputy speaker and industrial policy speaker of the German delegation, as well as a full member of the European Parliament's US and China delegation, comments on the latest developments in the conflict over the US Inflation Reduction Act:
"The climate protection ambitions of the United States are very welcome. However, the political initiative and especially related industrial policy aspects should have been better coordinated within the framework of a climate alliance. When it comes to climate protection and green competitive industrial policy, neither a subsidy race nor a trade war makes sense. We should support each other transatlantically instead of building up barriers. Functioning climate protection can only be efficiently implemented hand in hand. Good coordination and agreement between partners is essential, especially in times of crisis.
With its subsidies, the U.S. Inflation Reduction Act (IRA) threatens the competitiveness of the European industry, especially at a time when high energy prices are pushing European companies to their breaking point. The IRA's subsidies and tax credits should be examined in great detail for their WTO compatibility. But it is also important that the cooperative trade relations between Europe and the US are not jeopardized.
A subsidy race against the US can only be lost by Europe for European industrial policy, this means that existing strengths must be driven forward, as was the case with the Chips Act. A race to catch up with competitors such as Taiwan or the US in certain sections of the semiconductor value chain is not expedient and would cost the taxpayer a great deal of money.
The limited financial resources available to the EU and its member states must be invested in a targeted manner in the areas or sections where the EU industry is already strong. For a carbon-neutral economy, we need ambitious green investment on both sides of the Atlantic - otherwise we will all be the losers."
Please feel free to contact me with any further questions.