Macron's visit is 'major breakthrough' to avert trade war with the US, Le Maire says
Talks between French president Emmanuel Macron and US president Joe Biden this week in Washington have been a "turning point" able to avert a trade war between the two sides of the Atlantic, France's finance minister Bruno Le Maire said on Friday.
One of the topics on the two leaders' agenda this week was the potential negative impact on the European economy of Biden's U.S. Inflation Reduction Act (IRA), which will deliver $369 billion worth of subsidies and tax breaks to U.S.-based companies transitioning to a low-carbon economy starting in January.
Since Biden's administration announced the proposal earlier this year, France, as well as the rest of Europe, has been raising its concerns about the bill potentially weakening European companies at a time when these are already struggling with high energy prices and inflation.
Tax breaks to US manufacturers would put European companies at a disadvantage to their rivals across the Atlantic, while EU countries would be blocked from offering generous tax breaks to European companies by EU state aid rules.
Biden had until now seemed to ignore the issue, which was raised to him by EU leaders during the G20 in Bali earlier this month. But Macron has apparently managed to convince the US president of the dangerous impact of the bill on European companies during talks this week and avert a "subsidies race", according to Le Maire.
In a joint interview with Reuters and the Financial Times on Friday, the minister said that thanks to the French president's state visit to Washington "there's now a real awareness (of the issue), recognition by the U.S. administration, but also by Congress."
In a joint news conference with Macron on Thursday, Biden said that "tweaks" could be applied to the
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