Every week, Moritz Koch, head of the Handelsblatt office in Brussels, analyzes trends and conflicts, regulatory projects and strategic concepts from the inner workings of the EU, alternating with other Brussels correspondents. Because anyone interested in business needs to know what’s going on in Brussels. You can reach him at: [email protected]
The presidency of Joe Biden is a stroke of luck for the European Union, as is widely agreed in Brussels. Without a transatlantic in the White House, 2022 would have been different.
The comeback of the USA as a European power of order has enabled the EU states to defy the Russian nuclear threats and to support Ukraine in its defensive struggle against Russia. If the US President were not called Biden, but Trump, all of Europe would be in the same position as Army Inspector Alfons Mais attested to the Bundeswehr at the beginning of the war: “more or less blank”.
Now, however, the revitalized transatlantic partnership must pass its first stress test. In the summer, while there was fighting in Ukraine and arguments about tank deliveries in Germany, Biden and his Democratic party friends in Congress enacted the largest economic policy reform since Lyndon Johnson’s “Great Society”. Their goal: the reconstruction of the American middle class.
Biden has never made a secret of the fact that his foreign, economic, even climate policies are designed primarily for the good of “the working men and women of the United States.” The Europeans didn’t realize for a long time what this means for them, partly because the war overshadowed all other issues. The outrage is all the greater now. EU Internal Market Commissioner Thierry Breton railed against the “so-called like-minded partners” in Washington.
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The US government is doing what the Europeans have been demanding for a long time: it takes climate protection seriously. However, they choose a different path than the Europeans with their CO2 pricing. America pours out subsidies freely, tying them to buying American steel, using American minerals, and hiring American workers.
The market liberalism that has characterized Washington politics since the Reagan era is turning into dirigiste economic control that combines industrial policy and protectionism. Even if Biden is voted out in two years, Bidenomics should outlive him, just as Reaganomics outlived Ronald Reagan.
Direct line between Washington and Brussels
Bidenomics mean state billions for infrastructure, microprocessors and climate-neutral technologies, in short: economic nationalism in a green robe. Together with the significantly lower American energy prices, this creates a pull that draws European companies to the USA.
Biden has never made a secret of the fact that his foreign, economic, even climate policies are designed primarily for the good of “the working men and women of the United States.”
(Photo: Reuters)
The EU is already working on “countermeasures”. Using the example of battery production, the Commission is currently working out the idea of tightening European environmental regulations so that they actually prescribe investments in Europe.
The Europeans also reserve the right to file a complaint with the World Trade Organization (WTO). Fears that Biden’s Buy-American agenda will grow into a transatlantic trade conflict are therefore well founded.
>> Read here: Trade dispute between the EU and the USA before escalation – Paris demands a tough reaction
However, there is still time to avert an escalation. What distinguishes the current US administration from its predecessors is the desire to cultivate not only relations with the EU member states, but also exchanges with the EU institutions.
Biden’s security adviser Jake Sullivan is in close contact with Björn Seibert, the head of the cabinet of Commission chief Ursula von der Leyen. The coordinated sanctions against Russia are an expression of this cooperation, now there should be regular talks about the subsidy dispute. This gives hope that in the end two insights will prevail.
>> Read here: The US and the EU are approaching each other in the battery dispute
Firstly, that climate protection efforts, which become an industrial policy battle of all against all, primarily produce losers. And second, that the first large-scale European land war since 1945 is the wrong time for a transatlantic rift.
More: France’s economy minister – “I demand a coordinated, united and strong response to the US”