Vestager suggests solution achievable in EU-US dispute over green subsidies

Europeans fear impact on manufacturing and jobs of measures in Biden’s inflation reduction laws

Resolution can be found in the row over the impact of the new US legislation aimed at reducing inflation and promoting its green industries on European manufacturers, the European Commission has signalled.

European Commission executive vice-president Margrethe Vestager said in Washington on Tuesday that she had “a sense of comfort” following talks to senior Biden administration figures.

The EU is extremely concerned about provisions in the new inflation reduction legislation in the US which would provide tax credits for electric vehicles made in the country but not for those manufactured in Europe.

The law offers consumers tax credits of $7,500 (€7,165) for new purchases of Tesla, Ford and other north American-made electric vehicles. European leaders believe the measure discriminates against their manufacturers and poses a threat to jobs. The commission is seeking changes to the US legislation.


A joint statement issued after US-EU trade and technology council meeting outside Washington said: “We acknowledge the EU’s concerns and underline our commitment to address them constructively.”

‘Focused work’

At a subsequent press briefing on Tuesday, Ms Vestager said the approach of US president Joe Biden and the approach of her US partners at the talks “gave me the comfort that there will be focused work in order to find solutions”.

She said she would not go into details on the solutions that could be found. She said, “obviously what was important was the recognition by [US secretary of state Antony] Blinken of the areas of concern that need to be addressed and within a very short time frame”.

Mr Biden said earlier this month that components of the inflation reduction legislation, which also is designed to accelerate the US transition to a low-carbon economy, were not meant to affect Europe negatively.

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He implied that there could potentially be “tweaks” to accommodate non-north American countries but did not elaborate on how such changes would be made.

Ms Vestager also said there had been a “wake-up call” regarding the security of European infrastructure on foot of the war in Ukraine and the demolition of parts of the Nordstream gas pipeline as well as attacks on rail links in Europe.

She told The Irish Times there were worries about the security of the subsea cables linking Europe to the US, many of which pass through Irish waters.

“We have a concern and what we want to do to increase the different ways that data and information can travel,” she said.

Trade and technology

The joint statement issued after the EU-US talks said a trade and technology council working group “intends to discuss transatlantic subsea cables’ connectivity and security, including alternative routes, such as the transatlantic route to connect Europe, north America and Asia. We also welcome supplier diversification efforts in ICT supply chains and continue to discuss market trends towards open, interoperable approaches, alongside trusted, established architectures, in a technology-neutral way”.

The US-EU trade and technology council is co-chaired by the Mr Blinken, secretary of commerce Gina Raimondo, trade representative Katherine Tai, as well as Ms Vestager and European Commission executive vice-president Valdis Dombrovskis.

Martin Wall

Martin Wall

Martin Wall is the former Washington Correspondent of The Irish Times. He was previously industry correspondent