Europe prepares for a transatlantic trade war with the US. The EU is seriously preparing to respond to the US on January 1 entry into force of the American law to reduce inflation. The measures being considered by the Europeans could lead to a transatlantic trade war, predicts Politico. Europe in general and Germany, in particular, are disappointed that Washington is not proposing a peace deal. Modern politics looks like Russian roulette. Especially when it comes to European Union. If you want to feel the adrenaline, no need to test your luck playing Russian roulette. Test your luck by joining the CasinoChan login.
Europe’s fears stem from a $369 billion US package of subsidies and tax breaks to support green businesses in the US, which comes into effect on January 1.
In August, US President Joe Biden signed a law to reduce inflation, which provides for tax cuts, and benefits in the field of energy supply for enterprises opening in the United States.
Politico notes that the problem for Europeans is that the Washington scheme will encourage companies to move investments from Europe and will encourage customers to buy American. Especially, when it comes to buying electric vehicles, and this is infuriating major EU automakers such as France and Germany.
Germany is in a state of open panic as several of its leading companies wind down domestic operations in order to invest in other countries in the face of rising energy prices.
However, a truce seems unlikely. If this spat now gets out of control, it will lead to a trade war that will terrify the beleaguered Europeans.
In Europe, too, instead of an open tariff war with the United States, the option of breaking the classic set of free trade rules and playing its own game with Washington is being increasingly discussed. This provides for public investment in European industry in order to actively develop sectors. These sectors can be different such as the production of solar panels, and batteries. Moreover, intensifying the development of hydrogen technologies won’t be done in a day.
If earlier France was the leading supporter of the strengthening of European industry at the expense of state funds, now Berlin is increasingly inclined towards French thinking.
By the way, the story of the announced trade war between the EU and the US takes place against the backdrop of a record EU current account deficit.
For the European economy, the closure of the American automobile market will be a severe blow, especially since the Europeans have already lost the Russian market quite recently. Free access to the American market was one of the foundations of Euro-American economic cooperation.
Now, US protectionist measures could lead to an increase in the already record trade deficit. Against the backdrop of the inability to make up for it by attracting external financing.
At the same time, the EU cannot seriously oppose this, all the horror stories about the trade war are nothing more than a gesture of desperation: the United States is taking Europe out of one gate here.
The only hope of the EU is that the Americans will intimidate the Europeans but will not finish them off. Americans love this. Remember how in Hollywood movies? When a mafia boss puts a naughty subordinate on his knees, puts a revolver to his temple, and pulls the trigger. But the revolver is not loaded. This is it! Serve and remember your place!