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Macron Anxious to Resolve EU-US Spat Over Biden's Inflation Reduction Act 'in Early 2023'

© JIM WATSONFrench President Emmanuel Macron listens to US President Joe Biden speak during a joint press conference on December 1, 2022.
French President Emmanuel Macron listens to US President Joe Biden speak during a joint press conference on December 1, 2022.  - Sputnik International, 1920, 03.12.2022
The Inflation Reduction Act (IRA) grants tax reductions and energy benefits to businesses which invest on US soil. The legislation, which also encourages consumers to “Buy American” has been denounced by EU leaders such as German Chancellor Olaf Scholz and French President Emmanuel Macron as “representing market-distorting measures”.
Emmanuel Macron has said he intends to resolve tensions between Brussels and Washington over the contentious $430Bln Inflation Reduction Act as early as “the first quarter of 2023”, according to media reports.

“We need to find a way to solve these issues and we need to be able to invest much stronger and faster,” the French President told journalists in New Orleans on 2 December, adding that the European Union was hoping to be granted exemptions from the protectionist US legislation, similar to those enjoyed by Canada and Mexico.

The French leader was speaking after a meeting with US President Joe Biden in Washington, during which the two of them discussed the legislation, adopted in early August, granting generous tax breaks and energy benefits for businesses which invest in the US. Furthermore, the act encourages consumers to “Buy American” when it comes to such things as electric vehicles.
France's Finance Minister, Bruno Le Maire, said on Friday that Macron’s White House talks on the topic with Biden had shown progress.

“It’s a major breakthrough to say 'They’re our allies, they’re our friends', so even if we don’t have a trade deal with Europe we’re going to consider European components the same as those from countries with a trade deal,” Le Maire said.

“Nobody wants a trade war in our present situation. We have one competitor - China. The strategic goal of the US, it seems to me, is not to weaken Europe but on the contrary to work in partnership with Europe,” he added.
Macron, along with a number of European Union leaders, including German Chancellor Olaf Scholz, has denounced the legislation as anti-competitive and offering an unfair advantage to North American producers, and likely to rob Europeans of jobs in the energy and auto industry.
France's President Emmanuel Macron (R) and German Chancellor Olaf Scholz wave upon Scholz' arrival for a lunch at the presidential Elysee Palace in Paris on October 26, 2022 - Sputnik International, 1920, 28.10.2022
France, Germany Vow to ‘Strike Back’ Over US’ Inflation Reduction Act

'Tweaks' & 'Resynchronization'

The French president touched down in Washington earlier in the week driven by Brussels' fears that EU industries - already reeling from the self-inflicted energy crisis after the EU's sanctions policy targeting Russia over its military operation in Ukraine spectacularly backfired - would take an even greater hit. US policies subsidizing American companies under the Inflation Reduction Act have been slammed by Macron as "choices that will split the West" amid fears that the legislation might prompt European manufacturers to relocate to the US.
Speaking on Thursday after talks with Macron, Biden claimed at a press conference that the act, which focuses investments predominantly on climate and social spending, had never been meant to put America’s allies at a disadvantage.
“We agreed to discuss practical steps to coordinate and align our approaches so that we can strengthen and secure the supply chains, manufacturing and innovation on both sides of the Atlantic," Biden said.
"The essence of it is, we're going to make sure that the United States continues - and just as I hope Europe will be able to continue - not to have to rely on anybody else's supply chain. We are our own supply chain," Biden added.
He vowed that Washington would "continue to create manufacturing jobs in America, but not at the expense of Europe."
The POTUS also hinted at “tweaks that we can make that can fundamentally make it easier for European countries to participate” in the electric vehicle program.
Echoing this seemingly positive assessment of how the talks went, Macron was quoted as saying that he and Biden had a "very good discussion on the act and [the two nations] decided to synchronize their approaches.”
France's President Emmanuel Macron addresses the APEC CEO Summit during the Asia-Pacific Economic Cooperation (APEC) Summit in Bangkok on November 18, 2022. - Sputnik International, 1920, 01.12.2022
'It Will Split the West': Macron Lambasts Biden's Inflation Reduction Act
But for all the optimism-laden press statements, the two sides have failed to offer clarity regarding any specific measures to avert a trade spat. In early November, the EU's Internal Market Commissioner Thierry Breton threatened to appeal to the World Trade Organization and consider "retaliatory measures" in response to the massive US subsidy program.
It is now hoped that a deal to avoid tit-for-tat measures will be hammered out at the forthcoming EU-US Trade and Technology Council meeting, set for 5 December.
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