Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

China stands to win a transatlantic trade war, EU minister says

China stands to win a transatlantic trade war, EU minister says

‘A subsidy rally is a very dangerous game,’ says Czech trade minister.

China stands to be the only winner if a subsidy war breaks out between Europe and the United States, the Czech minister who chaired a meeting of EU trade ministers on Friday warned.

“A subsidy rally is a very dangerous game," Jozef Síkela told reporters in Brussels.

"The winner might then sit on [another] continent — not in Europe, and not on the American one,” said Síkela, trade and industry minister of the Czech Republic, which currently holds the presidency of the Council of the EU. A spokesperson made it clear that Síkela was referring to China.

Trade tensions are escalating between the EU and U.S., with Brussels fuming at America’s Inflation Reduction Act, which grants $369 billion worth of subsidies and tax breaks to U.S. green businesses like electric cars and renewable energy.

EU countries fear that the U.S. law — key parts of which will enter force on January 1 — could suck investments out of Europe and hollow out the bloc's industrial base.

About $200 billion worth of the U.S. handouts are illegal under World Trade Organization rules, French Trade Minister Olivier Becht told reporters before the meeting.

If the U.S. doesn’t modify its Inflation Reduction Act, the EU should use “coercive” measures to ensure that European companies benefit from the same conditions as American companies, Becht also said.

The clash comes at a time when Western governments are already under huge fiscal pressure from the energy-price shock caused by the war in Ukraine and the aftermath of the COVID-19 pandemic. With the global economy already on the skids, a headlong subsidy race could prove to be ruinous — with Europe facing the greater risks because it doesn't have the financial firepower to go toe to toe with Washington.


Tit for tat


Germany and France are mulling tit-for-tat retaliation against the U.S. in the form of a “Buy European" act that would encourage EU consumers to buy locally-made goods.

And if things escalate, the EU could retaliate by imposing tariffs and duties on U.S.-made goods. It could also deploy a new international procurement instrument that closes public tenders to companies from countries that discriminate against the bloc, an EU diplomat said.

But EU trade chief Valdis Dombrovskis urged people to see the bigger picture, stressing the need for maintaining transatlantic unity in the face of Russia’s invasion of Ukraine.

“I was in Kyiv last Friday. The situation is dramatic, with continuous Russian attacks on vital infrastructure. People have been deprived of water, heat and electricity,” Dombrovskis said.

“We need to deepen and sharpen transatlantic unity in the face of these horrific attacks. And we need the U.S. to maintain its support so that Ukraine can win this war."

In this somber geopolitical context, Dombrovskis warned against “the danger of conflating the Inflation Reduction Act with our broader relationship with the United States.”

AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

0:00
0:00
Close
France Faces New Political Crisis, again, as Prime Minister Bayrou Pushed Out
Nayib Bukele Points Out Belgian Hypocrisy as Brussels Considers Sending Army into the Streets
France, at an Impasse, Heads Toward Another Government Collapse
The Country That Got Too Rich? Public Spending Dominates Norway Election
EU Proposes Phasing Out Russian Oil and Gas by End of 2027 to End Energy Dependence
More Than 150,000 Followers for a Fictional Character: The New Influencers Are AI Creations
EU Prepares for War
Trump Threatens Retaliatory Tariffs After EU Imposes €2.95 Billion Fine on Google
Tesla Board Proposes Unprecedented One-Trillion-Dollar Performance Package for Elon Musk
Gold Could Reach Nearly $5,000 if Fed Independence Is Undermined, Goldman Sachs Warns
Uruguay, Colombia and Paraguay Secure Places at 2026 World Cup
Trump Administration Advances Plans to Rebrand Pentagon as Department of War Instead of the Fake Term Department of Defense
Big Tech Executives Laud Trump at White House Dinner, Unveil Massive U.S. Investments
Tether Expands into Gold Sector with Profit-Driven Diversification
‘Looks Like a Wig’: Online Users Express Concern Over Kate Middleton
Florida’s Vaccine Revolution: DeSantis Declares War on Mandates
Trump’s New War – and the ‘Drug Tyrant’ Fearing Invasion: ‘1,200 Missiles Aimed at Us’
"The Situation Has Never Been This Bad": The Fall of PepsiCo
At the Parade in China: Laser Weapons, 'Eagle Strike,' and a Missile Capable of 'Striking Anywhere in the World'
The Fashion Designer Who Became an Italian Symbol: Giorgio Armani Has Died at 91
Putin Celebrates ‘Unprecedentedly High’ Ties with China as Gazprom Seals Power of Siberia-2 Deal
China Unveils New Weapons in Grand Military Parade as Xi Hosts Putin and Kim
Rapper Cardi B Cleared of Liability in Los Angeles Civil Assault Trial
Google Avoids Break-Up in U.S. Antitrust Case as Stocks Rise
Couple celebrates 80th wedding anniversary at assisted living facility in Lancaster
Information Warfare in the Age of AI: How Language Models Become Targets and Tools
The White House on LinkedIn Has Changed Their Profile Picture to Donald Trump
"Insulted the Prophet Muhammad": Woman Burned Alive by Angry Mob in Niger State, Nigeria
Trump Responds to Death Rumors – Announces 'Missile City'
Druzhba Pipeline Incident Sparks Geopolitical Tensions
Cost of Opposition Leader Péter Magyar's Economic Plan Revealed
Germany in Turmoil: Ukrainian Teenage Girl Pushed to Death by Illegal Iraqi Migrant
United Krack down on human rights: Graham Linehan Arrested at Heathrow Over Three X Posts, Hospitalised, Released on Bail with Posting Ban
Asian and Middle Eastern Investors Avoid US Markets
Ray Dalio Warns of US Shift to Autocracy
Eurozone Inflation Rises to 2.1% in August
Russia and China Sign New Gas Pipeline Deal
Von der Leyen's Plane Hit by Suspected Russian GPS Interference in an Incident Believed to Be Caused by Russia or by Pro-Peace or by Anti-Corruption European Activists
China's Robotics Industry Fuels Export Surge
Suntory Chairman Resigns After Police Probe
Gold Price Hits New All-Time Record
UK Fintechs Explore Buying US Banks
Greece Suspends 5% of Schools as Birth Rate Drops
Apollo to Launch $5 Billion Sports Investment Vehicle
Bolsonaro Trial Nears Close Amid US-Brazil Tension
European Banks Push for Lower Cross-Border Barriers
Poland's Offshore Wind Sector Attracts Investors
Budapest Central European Fashion Week Kicks Off
U.S. Celebrates Labor Day
Hungarian National Team Captain Scores Epic Goal
×