Britain expressed its disapproval of US green subsidies in a letter to Washington, stating that they will “hurt numerous economies” and “undermine UK-US trade and investment flows,” according to UK media on Friday. Newspapers The Financial Times (FT) and The Times cited a letter from UK Trade Secretary Kemi Badenoch to her counterpart Katherine Tai in the US that criticized the $370 billion climate subsidy program.
To hasten the shift to a low-carbon economy, Washington’s landmark Inflation Reduction Act (IRA) includes tax breaks for electric vehicles and batteries built in the US. It asserts that subsidies are essential in the fight against climate change.
According to the Financial Times, Badenoch claimed that the proposal would “hurt many economies throughout the world” and “affect global supply chains in batteries, electric vehicles, and wider renewables.” According to Badenoch, the subsidies “also contradict our shared goals to promote free and fair trade abroad.”
She reportedly continued, “The UK expects to be and should be, as the closest of US allies, part of any flexibilities in the execution of the IRA.” When contacted by AFP, the British trade department declined to comment on the reports from Friday. In resisting the IRA, Britain had already joined the European Union and other nations. The EU regards the necessity for domestic manufacturing as a danger to jobs in Europe, particularly in the energy and car industries.
However, opinions among European countries on how to deal with the IRA have varied. Emmanuel Macron, the president of France, has urged Europe to enact its own extravagant subsidies, but Olaf Scholz, the chancellor of Germany, has favored communication with Washington. Products from major trading allies Canada and Mexico are excluded from the IRA, and on Monday Paris and Berlin urged for the expansion of these exclusions to include EU countries.
