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PARIS — US President Joe Biden needs to watch out. France is reclaiming its traditional role as a European troublemaker at the forefront of transatlantic trade.
Divergence between Brussels and Washington appeared to be easing under Biden’s scrutiny. A truce was signed over tariffs slapped on aluminum. This past year, Russia’s war against Ukraine meant that America and Europe needed to show a united front, at least politically.
But cracks are starting to appear again. The EU is furious that the US is pouring subsidies into the domestic electric car industry. Condemning Washington’s protectionism, Europe now threatens to formulate its own defenses.
Unsurprisingly, French President Emmanuel Macron is in the lead. “The Americans have bought the Americans and are pursuing a very aggressive strategy of state aid. The Chinese are closing their markets. This is not to say that there is no preference for .
Raising hopes, he called on Brussels to help consumers and businesses buy electric cars produced in the EU, rather than electric cars from outside the bloc.
European countries are struggling with their trade balances for good reason.
The war has hit the terms of trade hard, with rising energy costs leaving the EU with a huge trade deficit of €65 billion across the bloc in August. A year ago, it was just €7 billion. One manifestation of these tensions is Europe’s growing reliance on US liquefied natural gas to make up for lost Russian supplies, reigniting tensions.
Macron’s comments reflect the EU’s surprise at Washington’s anti-inflation legislation, which encourages US consumers to ‘buy American’ when making purchases. A greener car. The EU argues that requiring that vehicles must be assembled in North America and have batteries with a certain percentage of local content discriminates against the EU and other trading partners.
The European Commission wants to persuade Washington to find diplomatic compromises for European automakers and their suppliers. Otherwise, the EU will have no choice but to challenge Washington at her WTO, EU officials and diplomats told his POLITICO.
Ervir Fabry, a trade policy expert at the Jacques Delor Institute in Paris, said Mr Macron’s remarks were “clearly a rebuttal to the anti-inflation law”. “Macron plays the role of a bad cop compared to the European Commission, which left Washington with room for political coordination,” she noted.
“American domination”
France has traditionally been the most outspoken country in the bloc when it comes to confronting Washington on a wide range of trade issues. played an important role in destroying the That digital tax has angered big tech in the US and sparked a trade war with the Trump administration.
More recently, at the EU Transitional Presidency Council, Paris focused on trade defensive measures.This gives Brussels the power to retaliate against unilateral trade measures, including those from the United States.
The renewed tension is bad news for the upcoming Trade and Tech Council meeting in early December.
France will not be left alone in a potential trade war over electric vehicles. The German auto industry has also been particularly affected by the US measures, so these tensions will bring Paris and Berlin closer together, Fabry said.
But the “buy American” approach is not the only point of contention. The fact that Europe is increasingly dependent on gas imports from the United States has taken European dissatisfaction to the next level.
Gas import prices fell in September from all-time highs in August, but were still more than 2.5 times higher than a year ago. And taking into account the increase in purchases, France’s LNG import bills for August increased by some estimates more than 10-fold from a year earlier.
Economy and Finance Minister Bruno Le Maire warned last week that Russia’s war on Ukraine should not lead to “the economic domination of the United States and the weakening of Europe”. Lemaire criticized the United States for selling LNG to Europe “at four times the price it would sell to its own companies” and urged Brussels to act for a “more balanced economic relationship” between the two continents. asked to wake up
POLITICO found that the very same concerns were shared by some Commission officials, but also among French businessmen.
Bernard Spitz, head of international and European affairs at the French business lobby Medef, said it was unlikely that the United States had any economic gains from the war in Ukraine and suffered less from its economic impact than Europe. “It’s almost uncontroversial,” he said.
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