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German Habeck pessimistic about US trade dispute, calls for EU action – POLITICO


BERLIN — German Economy Minister Robert Habeck on Wednesday expressed skepticism that the EU could reach an agreement with the United States on a controversial package of industrial subsidies and suggested that Europe should respond with its own industrial support measures.

The EU has less than six weeks to convince the US to amend its Cut Inflation Act, which provides $369 billion in subsidies and tax breaks to US green businesses, but is considered by Europeans as discriminatory, in particular to encourage consumers to “buy”. American” when it comes to electric vehicles. Europeans fear this will drain EU investment and want to qualify for the same conditions.

“A solution [with the U.S.] must now be found in a few weeks, otherwise we will be forced to take another path,” Habeck said at an economic summit organized by the German newspaper Süddeutsche Zeitung.

At the same time, Habeck expressed doubts that such a solution could be found and referred to the fact that a previous trade dispute between the EU and the United States over aircraft subsidies for Boeing and Airbus had dragged on. for many years.

Elaborating on the alternative path the EU could take, Habeck said the EU must act to “level the playing field” with the United States on green technology incentives.

He pointed out that the EU had already developed industrial policy measures to stimulate domestic production and gave as an example the European Chip Law which aims to increase European production of semiconductors through public and private investment. .

“It’s the plan for a response” to US law, Habeck said, adding, “It would be something I would support.”

German Finance Minister Christian Lindner also on Wednesday raised the possibility of tax cuts to boost investment.




POLITICO

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