Why the U.S. Inflation Reduction Act is causing such a stir in Europe - Capital Street FX

-

 

French President Emmanuel Macron will use a state visit to Washington this week to press European Union concerns about the United States’ huge new green energy subsidy package.

While EU countries welcome the new commitment to the energy transition, they fear the $430 billion Inflation Reduction Act will put their companies at an unfair disadvantage.

WHY IS EUROPE ANGRY?

EU countries are worried their companies will suffer because of U.S. tax breaks for components used in renewable energy technologies like electric cars on condition they are made in North America.

EU countries consider that 200 billion euros ($207 billion) out of the total is tied to locally produced content provisions that potentially violate World Trade Organization (WTO) rules.

French Finance Minister Bruno Le Maire says that while subsidies to foster energy transition are fair game, they should comply with WTO rules and there should be a level playing field.

Not only do the tax breaks put European companies at a disadvantage to U.S. rivals, but EU state aid rules prevent EU countries from offering as generous tax breaks to companies looking to set up factories as they can get in the United States.

The EU is not Washington’s only ally outraged about the package, with South Korea also concerned its carmakers will not be eligible for the U.S. tax breaks.


READ MORE

Comments

Post a Comment

Popular posts from this blog

TECHNICAL ANALYSIS REPORT – 12 AUGUST 2022

-
Image
  WALLSTREET LOWER ON THE EXPECTATION THAT FED STILL NEEDS AN INTEREST RATE HIKE   Asia-Pacific stocks tracked Wall Street losses and the yen fell on Friday. The Shanghai Composite is down 0.11% at 3,278.39. Overall, the Singapore MSCI is down 0.03% at 308.45. Over in Hong Kong, the Hang Seng Index is up 0.61% at 20,150.00. In Japan, the Nikkei 225 is up 2.63% at 28,510.00, while the Topix index is up 2.07% at 1972.50. South Korea’s Kospi is up 0.11% at 2,526.55. Australia S&P/ASX 200 down 0.65% at 7024.90. Top News of the Day: The Nasdaq and S&P 500 retreated to close lower on Thursday on the realization the Federal Reserve still needs to aggressively boost interest rates to fully tame rising consumer prices despite fresh evidence of cooling inflation. The S&P 500 closed a tad lower after earlier hitting fresh three-month highs following data that showed the U.S. producer price index (PPI) unexpectedly fell in July. Market Summary as per 11/08/2022: European equities Thurs
Read more

GET DAILY PROFITABLE TRADE SIGNAL WITH CAPITAL STREET FX

-
Image
    USDZAR BUY = 16.7273 TARGET= 17.7765 SL= 16.6961                                                    SIEMENS AG SELL = 104.81   TARGET= 103.37 SL= 106.48                                                 BRENT CRUDE OIL SELL = 99.54 TARGET= 96.87 FOR DAILY LIVE SIGNALS VISIT US
Read more

EURCHF TECHNICAL ANALYSIS, FORECAST AND TRADE SIGNALS

-
Image
  EURCHF TECHNICAL ANALYSIS: WEEKLY CHART In the weekly charts, EURCHF is trading in an upward channel. It is trading above MA (20) but below MA (50) and MA (100). RSI is in buying zone which indicates bullishness. MACD is currently trading below zero which indicates bearishness. The immediate support is at 1.02268 and the resistance level is at 1.05095 EURCHF is trading in an upward channel until there is a trend reversal. EURCHF TECHNICAL ANALYSIS: DAILY CHART CLICK HERE FOR FUL L REPORT
Read more