Europe shows a united front against Biden's Inflation Reduction Act, says it threatens industry

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There is a political consensus among EU finance ministers that Biden's inflation reduction act could harm European companies.

"Each minister agreed that this is a subject of concern at the European level and that we need to see what is the best response," an EU official, who followed the ministers' discussions but preferred to remain anonymous due to the sensitive nature of the issue, told CNBC.

The EU has listed at least nine points in the U.S. Inflation Reduction Act that could be in breach of international trade rules. One of the biggest sticking points for the Europeans is the tax credits granted for electric cars made in North America. This could bring challenges to European carmakers that are focusing on EVs, such as"That's what we're eventually seeking: that the EU should be, as a close ally of the U.S.

The same official said that France's finance minister, Bruno Le Maire, told his counterparts that he was not asking for a strong negative decision against the EU's American friends, but rather asking for a "wake-up call" for his European counterparts who need to protect the interests of European businesses.

 

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