EU seeks to protect companies from US inflation law

The European Union (EU) is requesting an exemption for its companies from the law prepared by the US to reduce inflation, which includes comprehensive subsidies and tax regulations. EU Council President Charles Michel and EU Commission President Ursula von der Leyen spoke at the press conference held after the EU Leaders' Summit in Brussels. Michel pointed out that a long and strategic discussion was held on relations with the US at the summit, and said that they were determined to be a reliable and loyal ally of the US in many areas. Reminding that the EU and the US cooperate in various areas such as Ukraine, security, democratic values and climate change, Michel expressed that they wanted to take their relations even further. Drawing attention to the fact that they were evaluating the issue of the inflation reduction law in the US extensively, Michel said, "We want to meet with the US to obtain exemptions for European companies in the inflation reduction law." Reminding that Canada and Mexico were exempt from the said law, Michel said, "We are determined to establish an active dialogue with the US in order to protect the interests of the European business community." Michel stated that EU leaders have asked the Commission to present a proposal by the end of January that will mobilize tools at national and European levels to support the competitiveness of European trade. Drawing attention to the fact that the US should prevent the decisions taken to support its own businesses from negatively affecting companies in Europe, which is currently experiencing an energy crisis, Michel said, “In order to protect our economic and social structure in Europe, we need an ambitious strategy and swift proposals to support our competitiveness.” We need to convince investment in Europe EU Commission President von der Leyen also said, “We need to convince cutting-edge industries in the EU to invest here.” Stating that they need to take action for the EU to maintain its global leadership in clean technology sectors, von der Leyen explained that they are working on the most worrying aspects of the inflation reduction law with the Biden administration in the US. Pointing out that the EU should change the public support rules and make them simpler, predictable and faster, von der Leyen emphasized that the Commission will complete its work swiftly and prepare concrete proposals. Inflation Reduction Act The Inflation Reduction Act, which includes comprehensive health, climate and tax regulations aimed at reducing inflation in the US and various investments supported, is a subject of debate in Europe. The act includes an investment plan of approximately $400 billion in strategic and clean energy sectors in the US. The act, which also envisages encouraging the purchase of electric cars with tax breaks, includes regulations such as giving tax breaks of up to $7,500 for electric vehicles that use batteries produced in North America and contain minerals extracted from mines in this region. The EU is concerned that the new regulation, which makes tax breaks dependent on content produced in the US, will disadvantage European car companies and manufacturers in the green economy sector, including batteries and renewable energy equipment. The main risk for Europe, which is going through a difficult period with concerns about the energy crisis, high inflation and possible recession, is that the industry is falling behind.