EU must file a complaint against US Inflation Reduction Act

Brussels/Washington: Bernd Lang, head of the European Parliament for trade committee, warns of legal proceedings at the World Trade Organization (WTO) against the Inflation Reduction Act introduced by the US. He feels that nothing much would be achieved through mere negotiation. Ursula von der Leyen, the head of the EU, has criticised the US for their policy while recommending the EU make necessary changes in their rules.

The Biden Administration approved the Inflation Reduction Act in August with an allocation of $369 billion in terms of subsidies to companies based out of the US operating in the space of energy and environment. Europe is claiming this to be against the rules of international trade as it unfairly supports the green economy within the US. Hence the difference between the Western alliance is quite evident, which is in unison for supporting Ukraine in the Russia-Ukraine war.

In a meeting held last month, a senior official of the European Union expressed his displeasure and questioned if the US still considers itself a partner of Europe. During his recent visit to the US, French President Emmanuel Macron criticised the Biden Government’s policies. He said that the US policies for climate change are fragmenting the Western alliance. As the senior leaders of Europe have started to voice their views and from their decisions, it is clear that differences between Europe and the US are much more evident and intensifying.

Bernd Lang has suggested that a legal case at the WTO is necessary to prove that the US policies are against international trade laws and are also required to protect and support the industrial sector of Europe. Ursula von der Leyen has also strongly taken a stand against US policies. She recommended that the European Union would need to amend its rules to face the US law that defies antitrust and competition regulation of the WTO.