Emmanuel Macron begins his second state visit to Washington on Wednesday. And among the topics of this official trip, economic issues will be central. Because in this area, the Europeans have some criticism to make of the policy followed by the Americans. And the French president intends to remind his American counterpart of them.
First, there is the price of US gas exported to Europe, which is much higher than what is sold locally to US manufacturers. On this issue, the US president will be able to reply that market pricing is not his responsibility. But on the second bone of contention, the protectionist measures of the Inflation Reduction Law, his responsibility is, instead, full and total. This is one of the key measures of his administration, voted on in August before the midterm elections.
$369 billion in public money
In the Inflation Reduction Law, a colossal plan that, as its name suggests, aims to reduce inflation, there are new fiscal measures, among which the establishment of a minimum corporate tax rate of 15% stands out, measures aimed at lower the price of medicines. and financial aid aimed at accelerating the ecological transition and protecting the US economy by promoting national sovereignty.
Without going into details, let us remember that the 369,000 million dollars of public money that Joe Biden plans to spend will mainly benefit American companies or at least those that play the “made in the USA” card. We can give a specific example: to benefit from aid for the purchase of an electric car that can go up to 7,500 dollars, American motorists will have to choose a model produced in the United States and equipped with a battery – even “made in the USA”. .UU”.
Safran abandons a French project and wants to invest on the other side of the Atlantic
This US windfall will obviously weigh on the investment decisions of the major European and US groups. Some have already begun to review their strategy in this area. Safran, for example, a mis entre parenthèses are projet de quatrième usine à Feyzin (Rhône) en raison de la flambée des prix de l’énergie, tout en annonçant l’accroissement de ses capacités dans ses sites à l’international, notamment aux USA.
Northvolt, which was going to set up a battery factory in Germany, has given up, preferring a location in the United States where this Swedish group can benefit from the large subsidies guaranteed by the IRA. Volkswagen will invest $7 billion to produce SUVs in Tennessee. And BMW will inject 1,700 million dollars into its plant in Spartanburg (South Carolina).
Macron wants to win exemptions like Canada and Mexico
However, the protectionism assumed by the Biden administration is directed above all at China, with the Europeans being only collateral victims. Emmanuel Macron’s goal is therefore to convince Joe Biden to make a move. If it is impossible for Joe Biden to agree to revise the protectionist aspect of his big law, we at the Élysée Palace expect at least some accommodations that will allow European industrialists not to stay in the same boat as the Chinese.
Especially since the French president has some arguments to present. Starting with the fact that Canada and Mexico have already obtained exemptions for their manufacturers. And then there is this idea defended by Emmanuel Macron for more than a month, the Buy European law. This very French idea (Nicolas Sarkozy made it his workhorse when he was president) limits protectionism to public procurement, European preference should become the rule within the EU.
But this Elysian dream seems difficult to conquer. Avec une commission européenne dubitative, des Allemands qui jugent dangereux pour leur modèle économique toute entrave à la liberté du commerce mondial et des pays Européens dont la proximité géographique avec la Russie les incite à ne rien faire qui pourrait fâcher leur premier protector sur le plan militare , USA
Source: BFM TV
