Europe is suspicious of US subsidies for electric cars. (archive image)
The aid for US industry with guarantees for the next ten years distorted competition dangerously, Breton told the Funke media group in an interview published on Friday. “It cannot be that every US citizen gets a bonus of $7,500 if they buy a US-made electric vehicle. That acts like an additional tax for European manufacturers.”
When asked about possible punitive tariffs by the EU, Breton said: “That would be wrong. Now is the time to have conversations.” EU representatives will be in Washington next week. According to Breton, the dispute could also be fought before the World Trade Organization. “But we know that it would take at least five years for an arbitration decision to be made. Therefore, it is better to resolve the conflict now.”
The background to the dispute is a US law intended to alleviate the effects of inflation. The aim is to boost domestic industry and give it preference over foreign competitors. Subsidies and tax credits are linked to companies using US products or producing them themselves in the US.
French President Emmanuel Macron also warned during a visit to Washington that this would create such great differences that many companies would no longer invest in Europe.