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U.S., EU to address concerns over Biden's efforts to tackle inflation

A task force will address some of the lingering concerns about the consequences of President Joe Biden's signature Inflation Reduction Act.

U.S. officials met with EU President Ursula von der Leyen to discuss the ramifications of the U.S. Inflation Reduction Act. File Photo by European Union/EP/UPI
U.S. officials met with EU President Ursula von der Leyen to discuss the ramifications of the U.S. Inflation Reduction Act. File Photo by European Union/EP/UPI | License Photo

Oct. 26 (UPI) -- A joint task force will tackle some of the trade concerns stemming from the passage of the U.S. Inflation Reduction Act, a joint statement Wednesday from the United States and European governments said.

U.S. Deputy National Security Adviser Mike Pyle met in Berlin with European Commission President Ursula von der Leyen and the European Union's Head of Cabinet Bjoern Seibert to discuss the inflationary pressures facing the world's leading economies.

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Eurostat, the statistics office for the EU, showed inflation averaged 10.9% for all 27 member states in September. In the United States, inflation is running at 8.2%.

European governments have extended some subsidies to help their constituents cope with higher prices, while the United States is embracing the sweeping legislation in the Inflation Reduction Act to cope with the stress.

Both sides during their meetings in Berlin agreed to set up a joint task force that will address the concerns of the EU over the consequences of the IRA.

"Both sides agreed on the importance of close coordination to support sustainable and resilient supply chains across the Atlantic, including to build the clean energy economy," a joint statement read.

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The IRA provides vast support for domestic economic sectors ranging from renewable energy to vehicles. That could be seen as protectionist policies from some of the main trading partners of the United States.

Under the guidelines of the IRA, for example, electric vehicles must be assembled in North America to qualify for tax credits.

That's been a source of concern for the economies of Asia, which is an integral part of the global automotive supply chain. Korean automakers like Hyundai Motor and Kia may no longer qualify for the tax credit because most of those vehicles are assembled in Korea.

Similar issues could surface for European industries, particularly Germany with its dense manufacturing base. Germany's inflation is the highest it's been in 70 years.

"The EU welcomes the U.S. engagement on this issue and looks forward to working on solutions," Miriam Garcia Ferrer, EC spokesman for trade, told UPI in an email. "We remain strong, constructive partners, and agree on the importance of close coordination to support sustainable and resilient supply chains across the Atlantic, including to build the clean energy economy."

The first meeting for the joint U.S.-EU task force is scheduled for next week.

This week in Washington

President Joe Biden (R) meets with Israeli President Isaac Herzog in the Oval Office of the White House on Wednesday. The two leaders announced an agreement on a permanent maritime border between Israel and Lebanon. Pool Photo by Doug Mills/UPI | License Photo

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