French President Emmanuel Macron will raise concerns about the impact of American industry subsidies and tax breaks during talks with US President Joe Biden in Washington next week, a senior French official said on Friday.
France and other EU countries are increasingly concerned that the Inflation Reduction Act (IRA), signed by Biden in August, will distort transatlantic trade to give American companies an unfair advantage.
The law, designed to accelerate the U.S.’s transition to a low-carbon economy, will provide around $370 billion in green energy subsidies and tax cuts for U.S.-made electric cars and batteries.
“We cannot risk further deindustrialization in Europe while we try to re-industrialize,” a senior Macron adviser told reporters ahead of the French leader’s trip to Washington on Tuesday night.
The biggest concern is that “American investment in Europe will be repatriated,” he said during a briefing ahead of a foreign leader’s first state visit to Washington under Biden.
While Macron acknowledges that no major changes can be made to a law seen as one of Biden’s key achievements, he hopes to work out “exemptions” to help European industry.
“We can envision the US government agreeing exceptions for a certain number of European industries, perhaps as they are doing for Canada and Mexico,” the adviser added.
Macron, 44, has long advocated a “Buy Europe Act” that would provide incentives and requirements for consumers and governments to buy EU-made devices.
However, the idea has met opposition from countries like the Netherlands and Germany, who are worried about the cost and the impact on trade.
“The message from the Americans is ‘make your own IRA,'” said the French adviser.
Macron “will draw the necessary conclusions for us as Europeans from the talks,” he added.
– ‘gap’ –
Tensions over US industrial policy are one of several points of friction between the European Union and Washington that Macron will raise during his state visit next week.
EU countries are also frustrated by the huge profits being made by US energy exporters by shipping LNG gas to Europe following Russia’s invasion of Ukraine in February.
“Europe gives and suffers most in relation to the sanctions against Russia,” the French official said, referring to the sanctions imposed on Russia’s energy and industrial sectors.
“We see the risk of a rift between Europe and the United States,” he added, stressing the need for new “synchronization.”
Macron is expected to arrive in Washington Tuesday night before beginning a two-day official program that will see him receive the full honors of a state visit to the White House on Thursday.
He will be the first French president to be offered two state visits that have the highest level of diplomatic protocol, his office said.
His first came at the invitation of Donald Trump in April 2018 amid another transatlantic trade dispute over US tariffs on steel and aluminum imposed by the former Republican president.
That trip was memorable because Trump publicly flicked scales off Macron’s suit and the two men planted an oak tree in the White House garden, which was later removed and then died.
Relations between Macron and Biden were severely strained by a row over the delivery of submarines to Australia in 2021, but have since recovered, with the two men speaking and meeting regularly.
“The relationship (with Biden) is very fluid, friendly and very open on all issues,” the French official said.
“Presidents Trump and Biden are not the same personality at all and the dynamic is not the same,” he added.
Macron will be accompanied by a large delegation of ministers and business leaders, and the visit will include talks on nuclear energy and space cooperation.
On Friday he travels to New Orleans.