The Inflation Reduction Act (IRA) continues to be a thorn in the side of U.S. allies, and it was brought up during a meeting between President Biden and French President Emmanuel Macron.
During a press conference yesterday, Macron said the two had an “excellent discussion on the IRA and … recent pieces of legislation adopted by the American administration.” While he didn’t go into specifics, Macron stated “We agreed to resynchronize our approaches, our agendas in order to invest in critical emerging industries – semiconductors, batteries, hydrogen, everything that is absolutely decisive – because, as a matter of fact, we share the same vision and the same willingness.”
During a question and answer session, the IRA was brought up again as Macron had previously described it as “super aggressive” to European companies. President Biden responded by saying he makes “no apologies” for the legislation, which he strangely claimed to have written.
However, he went on to say “when you write a massive piece of legislation … there’s obviously going to be glitches in it and [a] need to reconcile changes in it.” Biden added, there’s “a lot we can work out” and “there’s tweaks that we can make that can fundamentally make it easier for European countries to participate.”
Biden went on to say the legislation was “never intended to exclude folks who were cooperating with us” and claim “we’re going to continue to create manufacturing jobs in America, but not at the expense of Europe.” Macron responded by saying the legislation was well-intended, but there were “consequences” in Europe and “there’s such a difference in subsidies” that some European projects might come to an end.
The French President went on to say the two countries need to “resynchronize” and “find a new policy to clarify our goals and continue together.” Macron added he wants to end “some 15 years of industry loss in our country and to have new manufacturing jobs.”
In a separate joint statement, the two said “they look forward to the results of the US-EU Task Force on the Inflation Reduction Act to further strengthen the US-EU partnership on clean energy and climate through mutually beneficial measures.”
The joint task force was established earlier this year, following European objections to the IRA as it prevents European-made electric vehicles from qualifying for incentives. Officials have previously suggested the IRA runs counter to World Trade Organization rules, and unfairly benefits vehicles and batteries made in North America.
Europe isn’t alone in lodging complaints as officials in Japan and South Korea have also raised the issue as models such as the Hyundai Ioniq 5, Kia EV6, Subaru Solterra, and Toyota bZ4X are no longer eligible for incentives. This puts them at a serious disadvantage when compared to vehicles that qualify for federal incentives.