Spanish Prime Minister Pedro Sanchez.
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DAVOS, Switzerland — Spanish Prime Minister Pedro Sanchez told CNBC on Monday that the European Union could learn something from Washington and its latest anti-inflation policy, saying he hoped a trade war between the 2 sides might be avoided.
“Now we have to learn,” Sanchez told CNBC when asked concerning the Inflation Reduction Act, which the US hopes will make it a spot for green investment.
“We’d like to reform some internal features of our industrial policy, corresponding to state aid, cutting red tape and attempting to send a message to industry around the globe that Europe and after all Spain is place to locate,” he added.
The sweeping US laws, which was approved by US lawmakers in August and features a record $369 billion in spending on climate and energy policies, has been met with mixed reactions from the 27 EU countries. The European Commission, the EU’s executive arm, previously said there have been “serious concerns” concerning the design of the financial incentives within the package.
The EU has listed points within the US Inflation Reduction Act that it believes may violate international trade rules. Considered one of the most important sticking points for Europeans is the tax breaks given to electric cars made in North America. This might be a challenge for European automakers focused on electric vehicles like Volkswagen.
There have been suggestions that Washington could discover a way for European firms to access these green subsidies, but this has infuriated some European politicians much more. For instance, recently the Prime Minister of Belgium Alexander De Croo accused the US of an “aggressive” campaign to lure firms to its shores through these means.
“I hope not,” Sanchez said when asked about the potential of a trade war between the US and the EU.
“I believe we want this dialogue to succeed in an agreement,” he said.
“I believe, that this [Russia-Ukraine] the war also shows us the importance of unity on the defense side, but additionally on the economic side in Western countries,” he added.