News

The United States forced out the “Avengers EU”

  From swallowing their anger to jumping their feet to protest, to rolling up their sleeves and drawing their knives, Europe is really impatient. On November 7, the European Union issued a written warning to the United States, accusing the United States of “Inflation Reduction Act” undermining the “fair competition” environment between Europe and the United States, saying that if the United States does not change course, the European Union may launch trade retaliation.
  For a long time, the United States and the European Union have been like a pair of birds in the same forest. Even if they occasionally disagree, they will eventually “sing together”. But recently the attitude of the EU is a bit of a “divorce”. Although they may not really part ways, they show the emotion of “you heartless, I am really blind”.
  The direct trigger was that in August this year, the United States formally signed the “Inflation Reduction Act” into law. On the surface, it is to deal with the high inflation crisis in the United States, but the core of the bill is to use large-scale subsidies to promote the development of the new energy industry in the United States. New energy companies that meet the regulations can obtain financial and other support as long as they set up factories in the United States. The total amount of subsidies is as high as 370 billion U.S. dollars, and there is no real upper limit.
  When the bill was first introduced, Europe didn’t pay much attention to it, thinking that it was similar to the previous bills and was aimed at China. Because China has surpassed Europe and the United States in some emerging fields, Europe often cheers for the US’s suppression of China, and even assists it. They think that they have the same “values” as the United States, and they are hard-core allies. They hope that after the Chinese industry is suppressed, the business can be transferred to their own hands.
  However, reality slapped me in the face. The huge US subsidies for the new energy industry will not be able to shake China’s related industries in the short term, but it will hurt weak economies, especially the new energy companies that have expanded their territories in Europe.
  At present, many local European automakers have responded and set up factories in the United States. Not to mention local American companies like Tesla, they directly withdrew the production lines originally planned to be built in Europe back to the United States.
  At the same time, the conflict between Russia and Ukraine has caused the cost of energy use in Europe to rise sharply, further prompting the transfer of energy-intensive enterprises, and their destination is China besides the United States. How can this not make Europe angry?
  Of course, Europe is not the only victim. The U.S. subsidy policy has almost pitted all its allies. Because the new energy industry is the key development direction of many developed countries, in addition to Europe, Japan and South Korea have also invested a lot of capital, but the United States has cut their “leeks”. Next, Japanese and South Korean companies have to choose not only between China and the United States, but also between their own country and the United States. It is really hard to tell.
  Facing the backstab by the United States, the EU’s attitude is much more intense than that of Japan and South Korea, but even if the knife is pulled out, there is a high probability that it will only waver, and what it can do is very limited. The United States engages in trade protectionism, and the younger brother who is not strong used to complain, but now he scolds, but what effect can it play?
  Therefore, the EU’s so-called “retaliation” is nothing more than a warning with loud thunder and little rain. Europe does not have the strength to retaliate equally, nor is it capable of implementing the same industrial subsidy policy as the United States. Even if the “Avengers” is formed, it will be difficult to compete with the “Thanos” of the United States in the short term.
  After all, the EU has no advantage in the core technology of the new energy industry, and its economic strength is relatively weak, but the most important thing is that it has not seen its relationship with the United States clearly. If it still considers itself a close ally, it will continue to be at the mercy of the United States and slaughter. Europe is short of energy and funds, but what it lacks most is foresight. If it cannot get out of its “loyalty” to the United States as soon as possible, the decline will only continue.