Is Germany sliding into a trade war with Washington? – The Informant. 🇳🇱 #WeStandAsOne

Is Germany sliding into a trade war with Washington?

Published on 22.11.2022

Sputnik reports that the economic and energy crisis sweeping Europe could lead to a trade war with the United States, writes the German journalist Hans von der Burchard in the American specialized media Politico.

Berlin fears the electroshock that Joe Biden will try to cause on the American economy, via his law on the Inflation Reduction Act (IRA), strong of an envelope of 369 billion dollars.

Massive subsidies to companies, especially green ones, which could lead German companies to invest across the Atlantic.

A nightmare in perspective for Germany, already weakened by soaring energy costs and the sanctions imposed on Moscow.

Subsidies for the purchase of American electric cars, for example, irritate the country of Goethe, a large automobile producer.

“Time is running out and a truce with Biden seems less and less likely […]. If this quarrel gets out of control, it will lead to a trade war, which terrifies struggling Europeans,” explains Hans von der Burchard.

Europe and the United States could then engage in a tariff war, like the one between Washington and Beijing.

The EU could also embark on a legal battle before the World Trade Organization (WTO), to hinder American subsidies considered “discriminatory”.

The German Plan B

To avoid getting there, Berlin could break the taboo of European subsidies to industry. Germany would particularly welcome incentives for the production of green technologies in Europe.

A big upheaval, while Germany has always leaned towards economic liberalism, unlike a more interventionist France.

The idea is also gaining ground in Brussels. A solidarity fund to strengthen European autonomy in key sectors, such as the production of batteries or semi-conductors, was mentioned by Thierry Breton, Commissioner for the Internal Market.

But time is running out for Europe, while negotiations with Washington are slipping. The IRA is due to come into effect on January 1.

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