U.S. President Joe Biden has seamlessly adopted the protectionism of his predecessor — and that is a huge problem for the EU. Europe is left with only two options for preventing important corporations from relocating overseas.
How happy Europeans and especially Germans were when Donald Trump was not reelected U.S. president! Everything would improve under Joe Biden, the Democrat, or at least that was the hope. America, the protector of the West, would again hold its strong hand over its European dependents in a predictable way. The era of the strong U.S. pulling a fast one on every weakling — especially regarding economic issues — would be over.
The reality is turning out to be more nuanced. In geopolitical terms, Biden is delivering what Europeans were expecting from him. America, the political power of the West, is supporting Ukraine in its fight against its aggressive neighbor, Russia.
Washington is delivering weapons without which Kyiv would long ago have lost the war. And in doing so, it is also strengthening NATO allies in Europe. Because once again it is becoming clear that without the Americans, the Europeans as a military force would hardly be worth taking seriously.
But in economic terms, even under Biden, the U.S. continues to be a problem for the EU — or, in other words, a hard-nosed competitor. Nothing demonstrates that better than the American Inflation Reduction Act. Under the guise of fighting inflation and climate change, the U.S. has promised billions of dollars in subsidies and cheap energy to corporations with production sites in the U.S.
Corporations are now considering whether they should build their new factories in America rather than in Europe. In this respect, French President Emmanuel Macron is correct to fear that the IRA will divide the West and is “super-aggressive.” German politicians and organizations are also pointing to the looming consequences of this U.S. policy.
So, what happens now? The Americans appear to have little interest in a revised version of the failed Transatlantic Trade and Investment Partnership agreement. The Europeans have only one option left: Through talks with the administration in Washington, they must try to negotiate changes in the legislation.
But it is at least equally important that the EU finally gather the political force to expand its domestic market and institute European-wide regulations. That is the only way that it can stand up to the competition with its own economic power and have a chance in the competition for business locations.
Leave a Reply
You must be logged in to post a comment.