And if the vast financing plans of the States to green the economy and the industries led to distortions of competition? This is, in essence, what the Minister of Foreign Affairs and Europe Catherine Colonna suggested, visiting Washington on Friday. According to the head of French diplomacy, the American climate investment plan – an envelope of 430 billion dollars -, promulgated by Joe Biden risks creating unfair competition between Europe and the first economy in the world.
Voted last summer and presented as a victory for the Democratic camp, Joe Biden’s climate plan notably introduces new taxation for businesses. Buthe text will also produce strong incentives to invest in solar and wind power in order to put an end to electricity produced from coal. For example, support for up to $7,500 in tax credits is created for the purchase of a electric car. Installing solar panels on its roof will be taken care of at 30%.
Also, several billion dollars in tax credits will also be offered to the most polluting industries to help them in their energy transition. It is on this type of measure, which concerns strategic sectors, that the French see a threat to the trade balance.
This program, “according to our point of view, has the consequence of not putting the United States and European players on an equal footing”said Ms. Colonna, speaking at the Center for Strategic and International Studies, a think tank in the US capital.
However, when asked about the risk of a new commercial conflict of the type that opposed Airbus and Boeing, Catherine Colonna tempered: “ Surely we are not calling for a (trade) war”.
The brain drain is likely to accelerate
His remarks echoed other similar recent concerns of French or German officials, who fear in particular a flight of investors and companies to the United States, attracted by the 370 billion dollars of this historic envelope dedicated to the environment. (and 64 billion to health).
Germany thus called on Wednesday for a ” answer strong from the European Union to the gigantic American investment plan on climate transition, which “must not destroy the level playing field between our two economies”, warned German Economy Minister Robert Habeck. Especially since, at the same time, Germany is forced to go back on a certain number of its climate commitments (coal and nuclear in the lead) in the face of the energy war traced by Russia in the war in Ukraine and which strangles the first European economy.
His French counterpart Bruno Le Maire said he shared the same fears that the American plan could “ jeopardize equal treatment” between the two continents.
Catherine Colonna also acknowledged that the European Union had long awaited bold action on the climate from the United States. “We are not going to complain that you have engaged the higher gear, which was necessary”she pointed out.