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Europe Risks New Age of Protectionism in Joining US Subsidy Race

  • The EU is planning its response to the US green subsidy law
  • Europe says it will defend domestic industry from the IRA

Joe Biden’s clean technology law has dragged the European Union into a subsidy fight that may trigger a transatlantic trade war, just as the allies are joining forces against Russia’s invasion of Ukraine. 

The EU has always defended the global rules-based order, even as the US has grown increasingly hostile toward the constraints it adopted as a member of the World Trade Organization. But Biden’s $500 billion in new spending and tax breaks to boost domestic green industries over the next decade may prove to be the final straw.