The European Union is now seriously concerned about the US Inflation Reduction Act. The Act approved by US lawmakers to combat soaring consumer prices puts at risk many European companies. For this reason, the United States and European Union launched a task force on the issue.
The US decided to tame inflation with a time-tested approach, namely to pour money into the economy. The government adopted a whopping package to support local producers. EU lawmakers are extremely worried about "the way that the financial incentives under the Act are designed." They believe that the $430 billion anti-inflation bill, which includes state aid for certain industries, will considerably harm EU companies. Speaking in Brussels, Thierry Breton, the EU Commissioner for Internal Market said, "We have established a task force to deal with these issues ... we are currently concentrating on finding a negotiated solution." Overall, there are nine controversial points in the Act that breach international trade rules, Breton stressed.
The new package adopted by the US authorities will significantly increase the competitiveness of American companies in the global market, harming European producers. Thierry Breton stated that this issue needs to be resolved. Otherwise, Brussels will have to apply to the WTO and take retaliatory measures.
The Inflation Reduction Act was signed by US President Joe Biden in August. It comprises tax credits for some industries as well as financial aid for the development of the energy and social sectors.
