Washington 75-year-old Joe Manchin is one of the most prominent senators in Congress. Because he makes headlines, he regularly gives his party, the Democrats, headaches. In late 2021, he blocked one of US President Joe Biden’s key pieces of legislation, the infrastructure program Build Back Better Act.
On his houseboat “Almost Heaven”, which is anchored on the Potomac in Washington, he receives politicians from both parties – and threatens to switch to the Republicans. Most recently, the senator from the mining state of West Virginia did not rule out wanting to run against Biden in the 2024 presidential campaign.
The fact that a single senator has so much power is due to the slim majority in the congressional chamber. The Democrats currently only have one vote more than the Republicans in the 100-strong Senate, and Manchin is using this lever. He is currently demonstrating his influence in the transatlantic dispute over electric car batteries.
Last week, the senator accused Janet Yellen’s US Treasury Department of being too accommodating to foreign automakers. The background: The “Inflation Reduction Act” (IRA), an unprecedented subsidy offensive for green energies, recently came into force. EU countries see the package as a frontal attack on European industry.
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One passage provides tax advantages for buyers of e-cars, but only if a certain proportion of the battery parts come from American production. So far, critical minerals have mainly been mined in China, Russia, Indonesia or the Congo. The passage of law was drafted by Manchin’s office, who chairs the Senate’s powerful Energy Committee.
Habeck wants to mediate in the subsidy dispute
The USA wants to make itself more independent from foreign supply chains with the strict requirements, but EU manufacturers fear massive disadvantages on the American market. “You are harming my country,” French President Emmanuel Macron complained to Manchin, the senator said in an interview with Politico magazine.
And Chancellor Olaf Scholz also expressed his displeasure with Manchin at the World Economic Forum in Davos. In Davos, Manchin asserted that he had not been aware of the disadvantages for friendly states – for example, he “did not know” that the EU had no free trade agreement with the USA. But he remains firm on the matter.
The U.S. Treasury Department has delayed full implementation of the law until March. Until then, negotiations between Washington and Brussels will continue. Next week, Federal Economics Minister Robert Habeck and French Economics Minister Bruno Le Maire are to travel together to the USA in the hope of further concessions.
Manchin is outraged by this goodwill and is now trying to counteract this by tightening the law, which would limit the scope for exceptions enormously. The US is “the superpower of the world,” Manchin said in Congress. “What hardly anyone understands: it is not primarily about climate protection, but about energy security”, about the independence of countries “that do not share our values”.
His home state of West Virginia is the second largest coal producer in the United States. Mining associations have long wanted critical raw materials to be mined primarily in the United States. Industry is urging the US government to stand firm. In Manchin it has its most powerful advocate. Every relaxation of the “Made in America” rules, so the argument goes, creates new loopholes through which car manufacturers can still process minerals from China or Russia. According to the senator, that is exactly what is happening in the implementation of the IRA.
Green and fossil: The USA is on two tracks
His person stands for the USA’s struggle for future energy generation, which is also reflected in the IRA: The package is two-pronged, even if the public focus is on the gigantic subsidies for solar, wind and other carbon-free power sources.
At the same time, the law hardly restricts fossil fuels. Every US President knows that coal states like West Virginia, Ohio and Pennsylvania decide elections. On the other hand, Biden’s green industrial policy promises lucrative and sustainable business models.
Basically, Manchin also has to balance these different interests. He not only houses coal mines in his state, but also the car manufacturer Toyota, which is increasingly focusing on electromobility. The senator receives donations from fossil energy producers – but is also friends with Bill Gates, who invests heavily in green projects.
His bill has little chance in the Senate, and any change to the IRA would be seen as a setback for Biden. That’s what most Democratic senators want to avoid. But Manchin’s move sends a clear signal: If the EU Treasury Department is even more accommodating, he will do everything in his power to get Congress to intervene.
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