Status: 03.12.2022 04:15 a.m
To fight inflation, Washington plans subsidies for companies that use US products or produce in the US. There is much criticism of this in Europe. Finance Minister Lindner warns of an escalation.
Federal Finance Minister Christian Lindner has warned of a trade war with the USA because of the planned US anti-inflation law. “The USA is our value partner, but at the same time there is an enormously protectionist economic policy,” Lindner told the “Welt am Sonntag”.
That is why the federal government must represent German interests in Washington and point out the negative consequences for the Federal Republic. The German economy is closely linked to the American market. Germany can therefore have no interest in a trade war, but must rely on economic diplomacy.
At the same time, Lindner advocated taking the law as an opportunity “to improve our competitiveness. If you look at it clearly, you have to realize that the constantly increasing EU demands on the economy in connection with energy prices are just as dangerous as the distortion of competition in the USA”.
Macron: Law threatens to split the West
The Anti-Inflation Act is intended to boost US industry and favor it over foreign competitors. Subsidies and tax credits are linked to companies using US products or producing them themselves in the US. According to European leaders, the anti-inflation package puts European companies at a disadvantage.
French President Emmanuel Macron raised the issue during his state visit to the United States. He warned that the law would create such disparities that many companies would no longer invest in Europe – which threatened to split the West. Federal Economics Minister Robert Habeck had already announced a “robust response” by the European Union to the US law.
US government does not plan to change the law
Despite EU criticism, the US government is not planning any subsequent changes to the law. “We have no plans to ask Congress to change the law,” said White House spokeswoman Karine Jean-Pierre. However, we are working with European partners to take their concerns into account. Exactly how this is supposed to happen remains unclear.
US President Joe Biden also made it clear that he would not deviate from the course of making the USA less dependent on international supply chains. But Biden said there are minor flaws in the law that could be discussed and resolved. There are discussions about this at the working level.