Senior EU officials announced on Thursday that the bloc will see exemption from US Inflation Reduction Act for European companies.
The President of the European Council Charles Michel underscored the importance of multifaceted relations with the US and added that the bloc wants to further deepen them during the press meeting he jointly held with Ursula von der Leyen, the president of the EU Commission, following the EU leaders’ summit in Brussels.
One of the most important matters discussed at the summit within the context of EU-US relations was the possible effects of the act, he added.
Michel said Canada and Mexico are among exempted countries and the bloc also wants to engage in negotiations with the US for obtaining an exemption for European countries.
We need an ambitious strategy and proposals which would allow us to support our competitiveness, which is required to maintain the economic and social fabric in Europe, he added.
Von der leyen, for her part, agreed with Michel and underlined the importance of attracting high-tech investments to the bloc.
“We need to ensure that the EU maintains its global leadership in clean tech despite stiffening competition,” she said.
Similarly, she reiterated that they will work with the US to reduce the impact of the Inflation Reduction Act on European companies.
Biden's Inflation Reduction Act includes a myriad of provisions, not all of them climate-related. But it is the act's sweeping electrical vehicle tax credits that have become a sticking point in bilateral relations between the US and EU. A bilateral task force has been set up to address Europe's concerns.
The $7,500 credits are reserved for new electric vehicles manufactured in North America, or any nation with whom the US has a free trade agreement. The US has 20 free trade agreements with other countries, according to the Office of the US Trade Representative. But none are in Europe, nor is there one with the EU.