(Bloomberg) -- Germany and France’s economy chiefs said they made progress in talks in Washington to improve cooperation with the US on green subsidies and defuse tensions over accusations of unfair competition.
Germany’s Robert Habeck said after the meetings on Tuesday that the US and Europe will work on a “critical minerals club” that would serve as a stepping stone for alignment on how raw materials like lithium or silicium are extracted, processed and distributed.
France’s Bruno Le Maire said both sides agreed on “full transparency” and “constant communication” on the aid they provide to industry.
“I really think we made substantive progress with our American friends in defining the rules of fair competition,” Le Maire said.
The European ministers met with US officials including Treasury Secretary Janet Yellen as they try to tailor part of the European Union’s response to President Joe Biden’s Inflation Reduction Act, which includes roughly $500 billion in new spending and tax breaks over a decade.
European countries have criticized the landmark legislation, warning it could unfairly rewrite the rules of globalization, and lure jobs and investment away from Europe.
But given Congress has already approved the measures and the US has already offered tax credits for Europe-made commercial vehicles, there is little room for maneuver on exemptions.
Le Maire said that while there is still work to be done to ensure the implementation of the act includes as many European components as possible, the EU already has many of the tools it needs to respond in funding and tax credit plans.
“It’s up to the EU to move on, but in cooperation with the US, with more transparency,” Le Maire said.
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