The Strategist

Ursula von der Leyen tells about EU fears over U.S. inflation law

12/05/2022 - 09:29

The European Commission's (EC) chief, Ursula von der Leyen, stated that European nations worry about the effects of the U.S. bill restricting inflation. The EC chairwoman claimed that it might lead to unfair competition, destabilize supply chains, and shut down marketplaces.

Ms. von der Leyen remarked that the legislative action could result in investment outflows and added, "The inflation bill should make us think about how we can strengthen our state aid system and adapt it to the new global context" (quoted by Reuters).

The European Parliament demanded earlier today that the EU lodge a complaint with the World Trade Organization against the United States due to issues with the coordination of subsidies to American businesses between the U.S. and European parties.

The Inflation Reduction Act, which featured tax reform, health care cost reductions, a switch to renewable energy sources, and the use of electric vehicles, was signed into law by American President Joe Biden on August 16, 2022. It led to a trade spat between the EU and the US, with the main point of contention being the distribution of subsidies for electric vehicles built in the US.