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(Bloomberg) -- French Finance Minister Bruno Le Maire said Joe Biden’s climate law shows the US has adopted an industrial policy that echoes a Chinese model of major subsidies to boost domestic production.
The European Union, which is sending a taskforce to Washington next month to lay out its concerns over the Inflation Reduction Act, must look at all options to defend its own industry, he said at a news conference in Paris alongside German Economy Minister Robert Habeck.
“We’ve tipped into a new globalization,” Le Maire said. “China tipped into this globalization a long time ago with massive state aid exclusively reserved for Chinese products. Right before our eyes, the US has tipped into this new globalization to develop its industrial capacity on US soil.”
The US law came into force in August, offering billions of dollars in incentives for renewable energy companies. It provoked concerns in Europe over the cumulative impact of some measures on industry, including the threat of luring away investment.
The French and German ministers agreed on the need to strengthen European industry if authorities on both sides of the Atlantic fail to reach a compromise. The EU needs to act more quickly and decisively, Habeck said.
French President Emmanuel Macron, who has called for a so-called Buy European Act, will raise the issue during a state visit to Washington next week. German Chancellor Olaf Scholz told a business conference in Berlin on Tuesday he was in talks with Biden about the distorting effects of the US measures and suggested the EU should increase its own state subsidies.
--With assistance from Michael Nienaber.
©2022 Bloomberg L.P.