The European Union and the United States may clash on the economic front. The battle between the allies may devastate their economies and threaten "fragmenting the West." Die Welt reports that the EU may begin a trade war against the US in a response to the Inflation Reduction Act (IRA), which was passed by the US Congress. Currently, EU policymakers are negotiating measures against Washington’s "super aggressive" tax breaks. The European Council may join France and stick to tougher measures, triggering a new transatlantic subsidy race. This may lead to a strengthening of European protectionism and a large-scale trade war with the United States. "This is an explosive mixture. France in particular insists on a strong European response," the article reads. Among the response measures discussed are even such "unthinkable before" as the "Buy European" rule for subsidies and government purchases. Earlier, South Korean Trade Minister Dukgeun Ahn urged the EU to unite against the IRA and take appropriate measures. He also warned the bloc not to open the "Pandora’s box" of protectionist industrial policy.
