European Union raises tone against EU subsidies to encourage purchase of electric cars

The European finance ministers raised their tone this Monday and even mentioned a “strong response” to USA by the massive plan of subsidies to companies, in particular those that affect electric cars.

The origin of the bitter controversy is the so-called Inflation Reduction Act, a huge investment plan for some 370,000 million dollars to face climate change.

The mammoth plan includes a tax credit of up to $7,500 toward the purchase of a electric car manufactured in the United States, and that the European Union (UE) considers exceptional aid contrary to the rules of international trade.

This regulation means that electric cars manufactured in Europa compete at a disadvantage in the US market.

Arriving for a meeting in Brussels on Monday, German Finance Minister Christian Lindner said he was not “sure if they [los estadounidenses] They are aware of our concerns.”

However, he added that it is necessary to do “everything to avoid an ‘eye for an eye’ scenario or even a trade war.”

French Finance Minister Bruno Le Maire was firmer, saying he expects the European Commission (the EU’s executive arm) to provide “a forceful response” to the US initiative.

The issue, he said, is “a matter of deep concern for the French government.

European Trade Commissioner Valdis Dombrovskis said on Monday that the issue was being discussed in detail with his US counterparts.

Meanwhile, the Spanish Minister of Economy, Nadia Calviño, said Monday in Brussels that her country wanted “a framework of rules that allows us to continue promoting international trade in a fair manner.”

Meanwhile, the European Commissioner for the Internal Market, Thierry Breton, threatened in an interview with “retaliatory measures” for considering that the US subsidies were contrary to the rules of the World Trade Organization (OMC).

Last week, the UE urged USA to grant European products the same exemptions it grants to cars built in Canada and Mexico.

Brussels and Washington have established a working group to try to find a solution.

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