Green trade war: The US and the UK at war
Image Source: Toledo Blade
The quest for a green environment is set to usher in a green trade war like never before.
The Inflation Reduction Act that the U.S. Congress passed last summer was a good idea. People who buy electric vehicles and other products that are good for the environment got tax breaks worth billions of dollars because of the act. This was done to improve the United States’ green economy and fight climate change.
But many European nations are upset that these subsidies will only be available to people who buy U.S.-made products. They think it is a thinly veiled attempt to get a piece of the high-tech manufacturing market in Britain and Europe by getting European companies to move their factories to the U.S.
Welcome to the global race to be the leader in green technology, where the future of the planet and the global economy are linked in a geopolitical game that could be risky.
The U.S. and the European Union have different opinions, but some East Asian countries are also unhappy. Some business people in the U.K. want to know where the U.K. stands in this fight.
Most countries give money to green technology, but Joe Biden’s decision to only give money for cars made in North America scared many allies. People who buy cars made in the United States can now get tax credits of up to $7,500 (£6,000).
What is happening in the U.K.?
We need to know more about where the U.K. fits into this.
Even though it is known that the Business and Trade Secretaries have talked to their U.S. counterparts about their concerns, they need to know more about what they want. For example, grant Shapps, who is in charge of the business in the U.K., says that the country doesn’t need a package of green incentives like the U.S. does because it is “ahead of the game.”
He is also sure that the U.K. will be a part of what could become a split between the E.U. and the U.S. as a result of the green trade war.
He also said that he had talked to John Kerry, who is the climate envoy for the Biden ministry, and that a lot of what the U.S. is doing is good. “The protectionist parts of this new bill, which could affect us, need to be cut back.”
How does the U.S. leadership feel?
Leaders who have talked to their U.S. counterparts about the Inflation Reduction Act say that it was an accident and that the U.S. “forgot” about Europe when they wrote this law, which is an economic “half aggression.”
Some people have said this was meant for China, not Europe. But there’s no doubt that big European manufacturers are changing their minds. Even though the need for net zero does lead to more manufacturing in Europe and North America, one European leader says that there is a red line that shouldn’t be crossed.
People believe that with the green trade war, things could get hard if European export production, investments, and jobs started moving across the Atlantic.
People also worry that “green technologies” won’t be enough to solve the problem. Because the pandemic caused bottlenecks in the supply chain, countries are rethinking how much they depend on East Asia to make their goods, not just China.
Building new places to make microchips in the E.U. and the U.S. costs big tech companies in the west a lot of money. The Europeans call this “strategic autonomy,” and the Americans call it “friend shoring,” which means putting back in place supply chains for friendly countries.
Even though many industries are going through big changes, much money will be moved from where it is now. The green trade war could affect how things are made for the next 100 years.
Some people in the business world in Britain worry that the E.U. and the U.S. will fight over important technologies like microchips, electric cars, and other important technologies. And it’s clear that the “global” that “global Britain” wanted to be a part of after Brexit has changed significantly, which raises some important strategic questions about Britain’s future.
Green trade war?
But now, new tensions are making people wonder how much inflation will go down and worry about where Britain fits into a world that has changed a lot.
A green trade war on the other side of the Atlantic is a huge worry. Joe Biden’s new bill to boost the green economy in the U.S. includes subsidies of £300 billion for buying electric cars, but only if most of them are made in North America. The Inflation Reduction Act also affects a wide range of other manufacturing and production, which has caused some European companies to move their factories to the U.S. Fertilizer companies are scratching their heads and wondering why European leaders don’t make the same rules.
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The U.S. says that its new laws will make things hard for China. But the leaders of the E.U. are angry and ready to fight back, possibly with their big subsidies that will probably also include “Buy European” clauses.