EU and US Trade Officials Meet Amid Subsidy Disagreements

Katherine Tai’s Meeting with US Inflation Reduction Act to Discuss Trading Relations With EU
United States Trade Representative Katherine Tai met today with the US Inflation Reduction Act to discuss the solid trading and economic relationship between the United States and the European Union (EU). The Act provides for multi-billion dollar investments in American-produced green technology, a bone of contention.

Tai is on his way to the Davos Forum in Switzerland where he plans to be tomorrow to reaffirm the importance of transatlantic cooperation. To mitigate the economic effects caused by the US law, Brussels contemplates selectively and temporarily relaxing the rules on State Aid to subsidize clean technologies.

The consultation with the countries to review the rules of state aid under US law led to the European Commission Executive Vice President, Margrethe Vestager, sending a letter to the bloc’s finance ministers on Friday asking their opinion on possible measures.

Vestager commented during a speech at the ceremony organized to celebrate the 30th year of the single Community market, “State aid can be a temporary adjustment, but that competitiveness is achieved from a dynamic, innovative and well-functioning market”.

The US Inflation Reduction Act provides for 369,000 million dollars in subsidies linked to producing in US territory, which the EU claims supposes unfair competition and discrimination for European companies, thus leading to relocation of investments. The meeting between Tai and the act aims to come to a solution and prevent such a large-scale displacement.

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