EU Ahead of Talks with US: "IRA Electric Vehicle Subsidy Issue Must Be Resolved"

[Asia Economy Reporter Jeong Hyunjin] The European Union (EU) is mounting an all-out effort to prevent damage to its domestic companies caused by the United States' 'Inflation Reduction Act (IRA).' Ahead of the official task force (TF) meeting between the two sides this week, the EU is emphasizing that this negotiation must resolve the issue.

Stavros Lambrinidis, the EU Ambassador to the U.S., said in an interview with Bloomberg Television on the 31st of last month (local time), "If European cars are excluded from the equation, the U.S. cannot achieve the transition to electric vehicles as quickly as it wants," stressing that the U.S. must address the IRA issue.

In August, the U.S. Congress passed the IRA, which provides various tax benefits to domestic companies and products manufactured in the U.S. The problem lies in the electric vehicle (EV) sector, where subsidies are only given to EVs that are finally assembled in North America. As a result, countries exporting cars to the U.S., such as Korea, Japan, and the EU, have voiced successive objections.

The EU argues that under the IRA, electric vehicles and batteries made in Europe will face disadvantages in the U.S. market and insists that European products should receive the same tax credits as those from Canada and Mexico. In particular, France claims that if measures such as relocating factories to the U.S. to receive American subsidies occur, it would result in an investment loss of 8 billion euros (approximately 11.3 trillion won).

Ambassador Lambrinidis emphasized, "We give Tesla the same incentives as we give our companies," calling it "a kind of non-discrimination that can help our economy." He also referred to this week's TF meeting, saying, "We must resolve it here," and added, "If we all do the right thing in the right direction, we are not afraid of where we will go."

Earlier last week, Valdis Dombrovskis, Vice President of the EU, who met with Katherine Tai, U.S. Trade Representative (USTR), expressed the view that excluding the EU from the U.S. legislation would be the ideal solution.

This content was produced with the assistance of AI translation services.