Don’t Dismiss Europe’s Objection to ‘Buy American’
The US once championed a simple truth: The world is better off when liberal trade is allowed to do its job.
How do you say “glitch”?
Photographer: Ludovic Marin/AFP via Getty Images
Speaking ahead of his meeting with President Joe Biden on Thursday, French President Emmanuel Macron warned that US trade policy could “fragment the West.” That might sound alarmist, but he was right. Biden’s programs to subsidize clean-energy investment and high-tech manufacturing have much to recommend them — but, executed incautiously, they do pose a threat to international economic cooperation. The White House should heed Macron’s message and guard against this risk.
A big expansion of investment in clean energy is crucial. But the Inflation Reduction Act, which Biden signed into law in August, channels much of its $369 billion outlay to US producers. (For instance, electric cars made in America can get up to $7,500 in tax breaks; those made in Europe can’t.) Wherever possible, the IRA’s programs prioritize “Buy American” and, not incidentally, US union labor. The CHIPS and Science Act, meant to support domestic makers of semiconductors, is a similar case. These policies set out to tilt the playing field for international trade, putting foreign producers at a big disadvantage.