Scholz relies on concessions from the USA when it comes to the inflation law

Created: 12/16/2022, 3:20 am

Chancellor Olaf Scholz (SPD) at the EU summit in Brussels.

© Nicolas Landemard/Le Pictorium Agency via ZUMA/dpa

According to the EU Commission, a new law in the USA disadvantages companies in the EU.

Exceptions are being demanded - they already exist for Canada and Mexico.

Brussels - Chancellor Olaf Scholz (SPD) is counting on the USA allowing exceptions for the EU in its measures to support its own economy.

"It is very clear that we are based on what the conditions are for Canada," said Scholz yesterday after the EU summit in Brussels on the talks with the USA.

"And we also have the impression that we will succeed."

US President Joe Biden signed the Inflation Reduction Act in August.

The law provides for billions in investments in climate protection and social affairs.

According to the EU Commission, this puts EU companies at a disadvantage compared to their US competitors.

Subsidies and tax credits are linked, among other things, to the fact that companies use US products or produce them in the USA.

The EU is pushing for exceptions, like those for Canada and Mexico.

"Defend own industrial development."

However, Scholz emphasized that even with such exceptions, not all problems have been solved.

In the next few weeks it will be a matter of agreeing on a fair framework with the USA.

"And then it will be a question of making regulations with which we can defend our own industrial development."

French President Emmanuel Macron spoke out in favor of supporting the economy in the EU, like the USA - if necessary against international trade rules.

"We apply rules that others do not apply," Macron said.

You can decide to continue doing this even if the two largest economic powers, China and the USA, do not apply the rules.

"But I don't think that's a good idea," Macron added.

EU Commission President Ursula von der Leyen generally rates the US law positively, since the United States is investing heavily in the climate-friendly restructuring of the economy for the first time.

However, parts of it are worrying.

"What we want is fairness," she said.

Von der Leyen was tasked by leaders at the summit with proposing a response to the US law by January.

dpa