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Habeck hopes for progress in the dispute over the US investment program

Federal Economics Minister Robert Habeck (Greens) hopes that his trip to Washington will make progress in the discussion between the EU and the USA on America's controversial anti-inflation law.

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Habeck hopes for progress in the dispute over the US investment program

Federal Economics Minister Robert Habeck (Greens) hopes that his trip to Washington will make progress in the discussion between the EU and the USA on America's controversial anti-inflation law. "I'm actually quite confident that it may not be possible to find further solutions today and tomorrow, but then in the next few weeks," he said on Monday morning before leaving for the US capital. The trip should serve to explore solutions for the problematic parts of the industrial program IRA. The talks should also deal with trade policy and the geopolitical situation.

The so-called Inflation Reduction Act (IRA) provides for investments in climate protection worth billions, but ties subsidies and tax credits to companies using US products or producing them themselves in the USA - which triggers concerns in Europe about competitive disadvantages. Associations warn of a trade dispute and demand better production conditions in Europe.

Habeck wants to meet German company representatives in the USA on Monday. On Tuesday, Habeck wants to meet with his French counterpart Bruno Le Maire, US Treasury Secretary Janet Yellen, US Trade Representative Katherine Tai and US Secretary of Commerce Gina Raimondo, the Federal Ministry of Economics and Technology announced.

For its part, the EU Commission sees a need for investments of hundreds of billions of euros in climate-friendly technologies for Europe, without quantifying this sum more precisely. She justified this in recommendations presented on Wednesday with subsidies in countries such as the US and China, which distorted the playing field. Specifically, it is about renewable energies, heat pumps, battery production and the use and storage of climate-damaging CO₂. The Brussels authority wants to expand and accelerate access to the relevant funding. In addition, she would like to give the EU countries more freedom for targeted subsidies.

Habeck called the proposals interesting and called for a robust European response to the US law, but stressed there was a good chance of avoiding a trade dispute. Cooperation in a trade and technology council between the US and the EU could be the "nucleus" of a kind of joint industrial agreement.

The French Ministry of Economic Affairs said about Habeck and Le Maire's trip: "The aim of the visit is to defend fair competitive conditions between the USA and the European Union." However, the benefit of supporting green industries is not in question. The aim is to have exceptions for European exports from the strict new US rules and also more transparency about the allocation of subsidies - the two ministers wanted to propose a mechanism for this.

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