Spanish Prime Minister Pedro Sanchez.
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DAVOS, Switzerland — Spanish Prime Minister Pedro Sanchez told CNBC Monday that the European Union has something to learn from Washington and its recent policies to fight inflation, saying he hopes that a trade war between the 2 sides will be avoided.
“We want to learn,” Sanchez told CNBC when asked the Inflation Reduction Act which the U.S. hopes will make it the go-to place for green investment.
“We want to reform some internal elements of our industrial policies comparable to state aid, reducing bureaucracy and attempting to send a message for the industry worldwide that is it’s Europe, and after all Spain, that’s an excellent place to locate,” he added.
The sweeping U.S. laws, which was approved by U.S. lawmakers in August and includes a record $369 billion in spending on climate and energy policies, has received a mixed response from the 27 EU nations. The European Commission, the chief arm of the EU, has previously said there are “serious concerns” in regards to the design of the financial incentives within the package.
The EU has listed points within the U.S. Inflation Reduction Act that it believes may very well be in breach of international trade rules. Considered one of the largest sticking points for the Europeans is the tax credits granted for electric cars made in North America. This might bring challenges to European carmakers which might be specializing in EVs, comparable to Volkswagen.
There was suggestions that Washington could find ways for European firms to access these green subsidies, but this has further enraged some European politicians. Belgium PM Alexander De Croo, for instance, recently accused the U.S. of an “aggressive” campaign to lure firms to its shores with these measures.
“I hope not,” Sanchez said when asked about the potential of a trade war breaking out between the U.S. and the EU.
“I feel that we’d like to have that dialogue to succeed in an agreement,” he said.
“I feel that this [Russia-Ukraine] war also shows us the importance of unity on the defense side but in addition on the economic side inside the Western countries,” he added.
