Since Joe Biden took office as president, Washington and its European allies have spent nearly two years in the honeymoon period, but now the two sides have begun to have serious differences around economic policies. If these cracks are not handled skillfully, Biden's new vision of the global economic order-that is, the United States cooperates with its allies and partners in Europe and Asia to curb the ambitions of China and Russia-may degenerate into a world where different economic groups compete with each other.
After months of muttering, the quarrel suddenly became public last week. Thierry Bredon, the EU Commissioner in charge of the internal market, announced that he would withdraw from the meeting of the US-EU Committee on Trade, Science and Technology held in Maryland this week, which is a key institution for coordinating economic policies between the US and Europe. He said that the agenda of the meeting "no longer provides enough space for many European industry ministers and enterprises to care." He refers to the European Union's complaint that the United States provides new subsidies for electric vehicles and clean energy, which is not good for European automakers and other enterprises. He said that he would turn his attention to "the urgent need to maintain the competitiveness of European industrial base".
French President Macron attended the first state banquet hosted by the White House in Washington last week since the outbreak of new crown pneumonia. He said that American subsidies "are very beneficial to the American economy, but they are not properly coordinated with the European economy."
On the morning of February 1 local time, US President Biden held a welcoming ceremony for visiting French President Macron at the White House.
Before Macron's visit, French Economy Minister Bruno lemerre accused the United States of pursuing a Chinese-style industrial policy.
These controversial subsidies are part of two large-scale bills passed by the US Congress earlier this year: the Inflation Reduction Act and the Chip and Science Act. European leaders believe that these two measures provide unfair subsidies to American companies, aggravate the competitiveness challenges facing the European continent, and may also force Europe to compete with the United States and China for costly subsidies.
Last week, the Dutch government also publicly responded to the pressure from the United States: the United States urged ASML and ASMI, the major Dutch chip makers, to cut off relations with China. The United States has launched a comprehensive campaign to prevent the sale of high-end semiconductor and chip manufacturing equipment to China, but has not yet persuaded allies such as Japan and the Netherlands to support it. Miki Adrian Jensen, Dutch Minister of Economic Affairs and Climate, told the Financial Times that the Netherlands is "very active" in its relations with China and that Europe and the Netherlands "should have their own strategies" in controlling their exports to China.
In the long run, the controversy focuses on the contradictory objectives of Biden's government's industrial policy. On the one hand, the United States hopes to build a strong supply chain and reduce the role of China in providing key technologies and inputs for future industries. This requires close cooperation with allies-what the government calls "friendly offshore outsourcing" to prevent repeated waste and ensure greater supply flexibility. On the other hand, the government is eager to see the revival of the manufacturing industry based in the United States, believing that the loss of the manufacturing industry is partly due to the competition from China, which will weaken the security of the United States and damage the American economy.
The loss of manufacturing jobs has also weakened the support of voters in industrial swing States such as Michigan, Pennsylvania and Wisconsin for the Democratic Party. Every new measure in the United States benefits American companies, not Europe or other close partners.
Europeans are not the only ones worried. Ngozi Okonjo-Ivera, Director-General of the World Trade Organization, is trying to protect the principle of equal treatment of trading partners, which has been the core of trade multilateralism for 75 years. "Many countries don't want to choose between these two groups," she said in a speech at the Lowy Institute in Australia. She warned that "policy-induced decoupling aims to improve flexibility and security, but in the end it may make people feel that decoupling is the goal itself".
Biden admitted that this legislation has "defects" and should be corrected. However, some situations are still unclear, such as whether the expression of subsidizing goods produced by free trade partners in the Inflation Reduction Act will be extended to the EU.
In addition, the Congress and the government, as well as many people in steel, solar energy and other industries, believe in the principle of "US priority" in this bill and believe that it is high time for the United States to revitalize its manufacturing industry. They will prevent an overly broad interpretation of the law.
Extended reading
After Macron came back from the United States, Europeans decided that it was the last straw.
Beijing, 65438+February 7 Recently, facing the United States, European leaders could not sit still.
French President Macron's recent state visit to the United States is regarded as the "last chance" for Europe and America to avoid slipping into a "trade war". However, according to Bernd Lange, Chairman of the International Trade Committee of the European Parliament, it seems futile to avoid the crisis through negotiations. It is necessary for Europe to launch a counterattack and "sue" the United States in the WTO.
Why does the United States, which promises to restore the transatlantic partnership, always give European allies nightmares?
When the United States acts, Europe is in a dilemma.
A few months ago, the United States promulgated the Inflation Reduction Act, which is a very attractive "trump card" for enterprises.
From the investment in clean energy such as wind power generation to the production of electric vehicles, batteries and related accessories, as long as the main production links are completed in the United States from June 65438 to October 2023 10, there will be tax-free "big gift packages" to reward high subsidies, and the planned allocation will be as high as 400 billion US dollars in 10.
The surge in energy prices triggered by the Ukrainian crisis has long overwhelmed European companies. At this time, the United States threw out huge concessions. How can European companies not be "crazy"?
Not only Germany and France, the economic leaders of the European Union, but also enterprises from European countries such as the Netherlands have accelerated the transfer of industrial layout to the other side of the ocean.
In the view of EU officials, the United States is trying to embarrass Europe through this move. They have accused the United States of engaging in trade protectionism and violating WTO rules, which will aggravate the contraction of industrial production in Europe.
5438+ 10 In June, German Chancellor Angela Scholz said that she would have in-depth discussions with the United States on the bill. He is worried that the US practice will trigger a "tariff war". German Deputy Chancellor and Minister of Economy and Climate Protection Chabeck hit the nail on the head and thought that the United States was "searching" for Europe.
In May 5438+065438+ 10, Macron personally hosted a banquet in the Elysee Palace twice, once to convene the energy consumption and carbon emissions of French manufacturing giants, and the other to convene the heads of a number of European "head enterprises" such as Ericsson, Volvo, Unilever and AstraZeneca, with only one purpose-please leave the production line in Europe. He also revisited the "Buy European Products Act" in Sarkozy's era, hoping to compete with the United States and save the process of re-industrialization in Europe.
France also decided to fight back with Germany. On June 22nd, local time, 1 1, the two countries reached a joint statement, * * * launched a "defense war" for the European economy, announcing the protection of European industries and boycotting the American bill.
Give face, throw a lining.
In this context, Macron embarked on a journey of "Syrian friendship" and "seeking fairness" towards the United States.
One of Macron's tasks is to express the strong relationship between France and the United States to US President Biden; The second task is to convey Europe's demands and call on the United States not to punish Europe with "radical" inflation reduction laws. According to the US "Politics" website, Macron's visit is on behalf of the opinions of the 27 EU countries, trying to persuade Biden to adopt the Mexican and Canadian models and grant exemptions to some European industries.
In the face of US congressmen, Macron lashed out at the US for harming European interests, but in his talks with Biden, his tone softened obviously. France wants to be "respected as a good friend" by the United States, and Macron said that "a strong European ally is in the interest of the United States".
However, the reality is very skinny. Biden promised during the talks that the bill could be "fine-tuned" to respond to the concerns of the EU, but White House spokesman Jean-Pierre later said that he would not seek the US Congress to amend the law.
Although Macron won face with a $500,000 White House state banquet, Europe did not find a "lining".
It was "released several times" by the United States
In recent years, France and Europe have indeed been "put in several ways" by the United States, and Macron has repeatedly criticized the United States for harming others and benefiting themselves.
The first round: grab the big submarine order
In September of 20021year, the United States, Britain and Australia set up a trilateral security partnership "Ocuss", which kicked France out and took away the "century contract" for France to build a 12 submarine for Australia. Macron was so angry that he recalled his ambassadors to the United States and Australia.
Later, Biden personally went to the residence of the French ambassador to Italy to meet with Macron, and foreign media said that the two sides had "reconciled".
The second round: sky-high natural gas
Since the beginning of the Ukrainian crisis, the United States has asked its European allies to impose sanctions on Russia, which has caused Europe to fall into an energy crisis and forced it to buy American natural gas. The American media "Business Insider" quoted estimated data, saying that the price of a ship of liquefied natural gas purchased from the United States rose to 275 million dollars when it arrived in Europe, and the profit of a ship was as high as 65.438+0.5 billion dollars.
In June 5438 +2022 10, Macron shouted at an entrepreneur conference in Paris that the United States and Norway sold natural gas to European countries at three to four times their own prices. "This is not the true meaning of friendship."
The third round: exclusive "small circle"
During the G20 Summit held in Indonesia from June, 20438 to October, 2022, Macron once again expressed dissatisfaction with the "Indo-Pacific Strategy" of the United States and Ocuss's exclusion of France.
The fourth round: inflation reduction bill
In fact, during the G20 meeting, Macron has already mentioned the negative impact of the US Inflation Reduction Act on the EU economy, and this issue is naturally the top priority during his visit to the United States.
But when Macron came back from the United States, Europeans found that nothing had changed.
The commentary believes that Macron's "confidence" in resolving differences is actually just a diplomatic gesture. If the United States really includes European countries in the scope of subsidies, it will only increase the dependence of European enterprises on the United States in green investment, which is not in line with the long-term goal of "European autonomy."
"European autonomy", how to fight back?
Fundamentally speaking, "European autonomy" means that Europe is out of dependence on the United States. This is the goal that Macron has worked hard since he took office, and it is also a growing sense of * * * in many European countries.
Earlier, EU Internal Market Commissioner Bredon expressed his dissatisfaction with the action. He believes that the United States has "not paid enough attention" to the issues raised by Europe and refused to visit the United States to attend the US-Europe trade and technology summit.
Fabayre, the financial spokesperson of the European People's Party, the largest party group in the European Parliament, advocates a tough policy toward the United States. He pointed out that if the United States goes its own way on the road of trade protectionism, the EU will have to "put all torture tools on the table". "This is definitely a' nuclear option', and no one wants to see such a situation at present".
Langer, Chairman of the International Trade Committee of the European Parliament, urged the EU authorities to lodge a complaint with the WTO as soon as possible about the US actions. Langer assumed that during the European and American negotiations, the implementation of the inflation reduction law might achieve "some minor changes", but he did not think there would be much substantial change.
On February 4th, 65438, Ursula von der Leyen, President of the European Commission, voiced that American policy "distorted the market" and split the global supply chain. He believes that the EU should take action to re-evaluate the capital supply in Europe as a whole and balance the competition brought by the implementation of the inflation reduction bill in the United States.
Since the inflation reduction bill will take effect in less than four weeks, the EU can play a "card" against the United States with limited choices. This may include the "Buy European Products Act" mentioned by Macron. If trade frictions escalate in the future, Europe will not rule out retaliating by imposing tariffs on American goods.
The European version of the US "political" website revealed that providing a large amount of subsidies to European enterprises through the "European sovereign fund" is also one of the emergency measures considered by the EU. The European Commission and European countries realize that in order to prevent the European continent from becoming an "industrial wasteland", they must act quickly before enterprises change their production layout.
American political websites, Qatar Al Jazeera news, Financial Times, The Economist and other mainstream media all come to similar conclusions, that is, American measures such as "economic nationalism", "Made in America" and "American priority" are undermining transatlantic trade, making Europe a victim and aggravating the tension between Europe and the United States.
The editorial of the European Times pointed out that for the United States, the areas where the United States and Europe can fight side by side are limited to ideological unity, and they are tough on Russia and middle countries. Once the interests of the United States are touched, sorry, weapons and natural gas have to be bought from the United States, investment can only flow to the United States, and the competitiveness of enterprises must be the first in the United States.
Economists have calculated the subsidy policy in the United States. Even if the EU subsidizes domestic enterprises to the maximum extent, its competitiveness is only 1/4 of that of the United States. In other words, if you buy an electric car made in the United States, you can get a price reduction of $8,000, while if you buy it in Europe, you can only get a subsidy of $2,000 at most.
Regardless of the joys and sorrows, only the moment when European and American allies show unity is always so short. When will Europe wake up from its nightmare?