German Finance Minister Christian Lindner called on Joe Biden’s administration to apply the principles of friend-shoring (a policy of restricting trade, primarily in key resources, to a circle of friendly allied countries) to the recent package of “green” subsidies, which could provoke a trade war between the US and the European Union.
He said he was concerned that the U.S. climate package, known as the Inflation Reduction Act, was putting European companies at a disadvantage, and called for “trade diplomacy” to find a solution. He added that a friendship in which countries with shared values cooperate in producing and sourcing raw materials is the right way forward.
Partners in values should be preferred trading partners, Lindner told Bloomberg TV.
Some rules governing green subsidies have angered U.S. allies in the EU and beyond. This week, Germany and France urged the government in Washington to give Europe the same exemptions enjoyed by countries that have free-trade agreements with the U.S., such as Canada and Mexico.
Although Biden has said he sees room for adjustments to make it easier for European countries to participate, it is still unclear how the law might be revised or if it is even possible. Republicans are unlikely to want to amend it after they take control of the House next year.
