Germany and France are pushing for climate cooperation with the USA

Washington, Paris When German Economics Minister Robert Habeck and French Economics Minister Bruno Le Maire visit Washington, every argument has to be right. Because on average only 30 minutes are scheduled for each conversation partner.

But Habeck and Le Maire are determined to use the time: Germany and France want to join forces to convince the USA of stronger climate cooperation. This is necessary in view of the massive subsidies for green technologies that the USA is pumping into its industry as part of the controversial “Inflation Reduction Act”. Habeck and Le Maire now want Washington and Brussels to coordinate better on the expansion of climate-friendly technologies in the future.

The aim is to introduce a “transparency mechanism” to compare the actual effects of subsidies for green technologies and products on both sides of the Atlantic, according to French government circles. It is also about keeping an eye on CO2 prices and seeing at what price green hydrogen will be available in the USA and Europe.

Finally, they wanted to promote a “cooperative approach” among allies, it said. Before leaving for Washington, Habeck welcomed the fact that the USA “is now getting serious about climate protection. This has been desired for a long time and now it is finally happening,” said the minister.

In a day and a half, ministers will have to strike a balance between demands and constructive cooperation. The focus of the trip is on the Europeans’ concerns about America’s protectionism and the preference given to companies that produce in America.

France’s Economy and Finance Minister Bruno Le Maire

The minister also wants to speak to US Treasury Secretary Janet Yellen.

(Photo: Reuters)

Habeck and Le Maire will meet with Biden’s top ministers. Habeck will speak to Energy Minister Jennifer Granholm on Monday, a big winner in terms of the billions in green tech subsidies. Talks are scheduled for Tuesday with Finance Minister Janet Yellen, her agency responsible for implementing the Inflation Reduction Act. A meeting is planned with Economics Minister Gina Raimondo, who is implementing the blockades against Chinese tech companies.

An appointment was still open with trade officer Katherine Tai, who is considered an architect of Biden’s “Buy American” strategy. In the White House, Habeck and Le Maire are scheduled to meet with Biden’s national security adviser, Jake Sullivan, who believes protectionism is imperative to strengthen America’s middle class.

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They also want to exchange views with Foreign Minister Antony Blinken, one of the most important mediators in transatlantic relations. The French program also included a meeting with Joe Manchin, the powerful Democratic US Senator who had the controversial passages on promoting electric cars written into the “Inflation Reduction Act”.

The fact that the ministers of the two largest EU economies are traveling together is a sign of the seriousness of the situation. The planned US incentives to buy e-cars are particularly controversial. $7,500 per vehicle is only available if the models and components were mainly manufactured in the USA, EU manufacturers fear disadvantages in the American market.

A revision of the law by the US Congress is considered impossible, so the EU is pinning its greatest hope on implementation by Yellen’s Treasury Department. The authority has published initial guidelines on the “Inflation Reduction Act” and they are due to be finalized by March.

According to Biden, there will be no turnaround

But how much can Habeck and Le Maire actually do? There will be no U-turn, Biden made that clear just a few days ago: “You see, I’m being criticized internationally for perhaps concentrating too much on America. To hell with it!” the president told union officials in Virginia. Biden is in campaign mode. On Tuesday he will deliver his annual State of the Union address in Congress and point to his industrial policy successes.

Around 750,000 jobs have been created in manufacturing since he took office. The US government wants to quickly free the country from its dependence on Chinese supply chains and raw materials, especially in the green tech sector. The incursion of a Chinese spy balloon into US airspace has further soured relations with the country.

>> Also read here: 350 billion euros: Von der Leyen wants to keep companies with subsidies in the EU

If the EU nevertheless gets the desired exceptions, the law will be “carelessly interpreted”, warns Senator Manchin, and threatens to lose its desired effect, namely that US companies and production in particular will benefit from the incentives.

The USA had made concessions to the EU on an important point. Electric leasing vehicles are also subsidized with tax credits, which makes things easier for German car manufacturers in particular. But the content requirements for batteries are still in the air.

40 percent of a battery’s critical minerals should be extracted, processed or recycled in the USA or in a country with which the USA has a free trade agreement, and even 80 percent from 2027. The EU excludes the “free trade agreement” hurdle – even if the US Treasury Department indicated that the government is aiming for a “broad definition”.

However, it is becoming clear that Washington will not accommodate the Europeans on all points. Those close to Le Maire pointed out that the wording of the law left “little leeway” for concessions.

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