The EU urged the United States on Monday to grant its firms special status to sell electric vehicles, as Brussels rails at “discriminatory” measures in President Joe Biden’s flagship economic plan.
The 27-nation bloc is upset about Washington’s “Inflation Reduction Act”, which will see vast spending on green energy initiatives and includes tax breaks for US-made electric cars and batteries.
Brussels says those benefits for American electric vehicle makers would put e-cars made in the EU at an unfair disadvantage on the lucrative US domestic market.
After talks between the bloc’s trade ministers and US representative Katherine Tai in Prague, EU officials said European cars should get the same exemptions as those from Canada and Mexico.
“We have to be realistic and see what we can negotiate,” said Czech trade minister Jozef Sikela, whose country holds the EU’s rotating presidency.
He branded the US measures as they stood as “unacceptable”.
Brussels and Washington have set up a task force to try to hammer out a solution that is set to hold its first meeting this week.
“It probably will not be easy to fix it, but fix it we must,” said EU trade commissioner Valdis Dombrovskis. “We will give negotiations a chance before engaging in further considerations.”
The US credits have raised particular hackles in Europe’s manufacturing powerhouse Germany, which is concerned for its key car industry.
Chancellor Olaf Scholz warned earlier this month that US climate protection plans that would shield domestic companies from foreign competition could trigger “a huge tariff war”.