By Kanishka Singh
WASHINGTON (Reuters) – U.S. Trade Representative Katherine Tai on Friday met with European Union Executive Vice President Valdis Dombrovskis and discussed the U.S. Inflation Reduction Act, Tai’s office said in a statement.
EU countries fear the U.S. legislation’s $369 billion of subsidies for electric vehicles and other clean technologies could put companies based in Europe at a disadvantage.
The subsidies, largely for manufacturers based in North America have local content requirements that EU leaders fear may lure companies away from Europe. The legislation excludes electric vehicles assembled outside of North America from tax credits in the United States.
“Ambassador Tai expressed her optimism that the United States and European Union could continue working closely together on their shared goal of strengthening the clean energy sector globally,” Tai’s office said after the meeting on the margins of the Munich Security Conference.
The EU wants the same treatment as U.S. trade partners Canada and Mexico, whose production is largely included in the subsidy schemes but any revision of the act by the U.S. Congress is out of the question.
European nations are not the only ones who have raised concerns with the Inflation Reduction Act. South Korea has also sought talks with the United States over it.
The European Commission and the White House have set up a high-level task force to discuss the issue.
Tai and Dombrovskis also discussed the ongoing negotiations for a global arrangement on sustainable steel and aluminum and agreed to remain in close contact as negotiations continue in 2023, the USTR office added.
(Reporting by Kanishka Singh in Washington; Editing by David Gregorio)