Macron attacks Biden: "US policy is destroying jobs in Europe" - is there a trade war with the US?
Created: 12/02/2022 12:03 p.m
By: Klaus Rimpel
Is there a trade war between Europe and the US?
During his state visit to Washington, French President Emmanuel Macron attacks the "America First" economic policy.
Munich/Washington – French President Emmanuel Macron used unusually harsh words to castigate US economic policy during his visit to Washington – and the bad mood was not just because he was offered wine and cheese “Made in America ’ was served – of all things, the dishes that France is actually famous for.
There is a danger that on many issues the US would first look at itself and then at its rivalry with China, Macron complained.
He warned Biden against "decisions that will fragment the West."
Without coordination between the US and the EU, "many jobs are at risk of being destroyed," according to Macron.
The subsidies for the US economy are "super aggressive" towards French companies, Macron said at a lunch with US lawmakers.
Biden wants to boost the US economy with the current law - at the expense of Europe
The cause of the anger is the Inflation Reduction Act (IRA), a gigantic program to stimulate the US economy.
Joe Biden wants to pump subsidies of a good 370 billion dollars into US companies that ensure climate protection and energy security.
The catch from a European point of view: the state aid is linked to the fact that the products and preliminary products must come from US production.
For example, there should only be a tax credit for electric vehicles of $7,500 if the models are assembled in the USA and the batteries are predominantly "Made in America".
imago0195792550h.jpg © IMAGO/Chris Kleponis - Pool via CNP
By 2024, 40 percent of the batteries should come from North America or from US free trade partners, and by the end of 2026 the proportion should rise to 80 percent.
The US has free trade agreements with Japan and South Korea, but not with the EU or any EU country.
"If only we had TTIP," complains Michael Hüther, Director of the German Economic Institute, about the failed trade agreement between Europe and the USA due to chlorinated chickens and the like.
Biden's economic policy particularly dramatic for Germany
Biden's subsidy policy is dramatic for the German economy: With a volume of 115 billion euros, the USA is by far the number one German export destination.
BMW boss Oliver Zipse warned that the USA wanted to relocate the entire value chain to the USA via subsidies.
But: "No region of the world can produce electric cars independently of all others." Federal Minister of Economics Robert Habeck (Greens) is already calling for a "robust answer" from the EU to the US subsidies.
EU Internal Market Commissioner Thierry Breton even threatens to file a complaint with the World Trade Organization (WTO).
Still, yesterday Macron and Biden reaffirmed their willingness to work together.
Ifo boss Clemens Fuest warns against going on a confrontational course.
"The law to reduce inflation undoubtedly contains protectionist elements that are unacceptable to the EU," said Fuest.
One should therefore “neither start a trade war nor enter into a subsidy race”.
US expert James Davis explained that covert protectionism has generally increased over the past ten years.
“Macron understands something about that.
His policy of 'strategic autonomy' includes a host of covert protectionist measures to protect French industry and the agricultural sector from foreign competition.” (
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Habeck wants to make the economy more independent of China
Federal Minister of Economics Robert Habeck (Greens) wants to achieve greater independence of the economy from China.
The Minister plans to impose new reporting obligations on German companies with strong China business and to reduce political support for German-Chinese economic projects, the news portal “The Pioneer” reported.
"As China reduces its dependency, China's economic importance for the EU and Germany continues to increase," says a paper on the China strategy.
Ministry officials expect China to annex Taiwan by 2027 at the latest. Germany's potential for blackmail is high given Germany's economic ties.
As a countermeasure, the ministry proposes focusing on "alternative future markets such as Asia-Pacific, Latin America and Africa, as well as a revision of foreign trade promotion".