The European Union expressed serious concern over the U.S. Inflation Reduction Act stating that the E.U has violated international trade rules.
A comprehensive tax, health and climate bill has been passed by U.S. lawmakers. in August and included a record $369 billion in spending on climate and energy policy. The bill also includes tax credits for electric cars made in North America and supports the U.S. battery supply chain.
European officials have acknowledged the green program goals associated with the package, but expressed concern over "the way the financial incentives under the Act are designed", which will be presented to U.S. officials. The EU has listed nine of the tax credit provisions that have issues.
This is not the first time Europe has voiced its concerns over the policy. The EU's competition chief, Margrethe Vestager, said last month that "in principle, the U.S. should be doing this to its EU counterpart", as reported by the Financial Times.
In principle, the EU is concerned about potential new trade barriers on European electric vehicle manufacturers. Not only the EU, South Korea, for example, has also raised similar concerns.
Ngozi Okonjo-Iweala, director general of the World Trade Organization, said on Monday that countries need to be "very careful that any policy taken should not be discriminatory, should not favor domestic goods."
