Alwaght- President Emmanuel Macron of France and German Chancellor Olaf Scholz have reportedly agreed that the European Union needs to respond to the US if Washington decides to offer energy benefits and tax cuts incentivizing firms to shift production stateside.
Macron and Scholz are both concerned over the White House's Inflation Reduction Act, which they deem “protectionist”, reported RT citing the Politico news website.
The matter was reportedly discussed at their lunch in Paris the day before. According to the outlet, citing “people familiar with their discussions,” the two leaders agreed that the state subsidy plan announced by the US would constitute unfair competition, and should not go unanswered.
The major European powers have agreed to unite their ranks against the US protectionism despite the differences on such mattress as energy and defense, Politico said.
The countermeasures would include similar incentives to the EU businesses, reports suggested.
However, if implemented, the measure would risk sparking a trade war between the bloc and the US, the article claimed.
Appearing on the TV channel France 2 on Wednesday night, Macron called for a “Buy European Act like the Americans,” adding that the EU should “reserve [our subsidies] for our European manufacturers.”
He further said that he and the German leader have convergence to move forward.
They however are not planing shifting to a confrontation mode, said Politico, adding they prefer a compromise with the US.
Economists have been warning that the European blind following of the US in world crises only makes the Continent vulnerable while Washington benefits. They raise Ukraine war case as an example, suggesting that while the EU is self-damaging with rejection of cheap Russian oil and having to buy expensive fuel from other suppliers, the US takes the lead as a major oil reserves owner and thus capable of bargaining on energy provided by the foreign suppliers.