Belgium joins the anger over US subsidies

Business leaders argue Washington’s IRA threatens industries across EU

The US subsidies are “a protectionist stab in the back from the Americans”. OLIVIER JORIS Executive manager of the Federation of Enterprises in Belgium

Belgian Prime Minister Alexander De Croo has joined other European officials to cry foul over the US government’s Inflation Reduction Act, a $430 billion support program for US industries that was passed last August and which Europe fears will lure companies away from its shores.

Subsidies provided under the IRA are to encourage US companies to make the transition to more environmentally friendly processes and greener energy, but Europe claims they would make rival businesses less competitive.

Speaking to members of his centrist Renew group, De Croo accused the United States of aggressive tactics and ignoring their impact on supposed friendly nations.

“The US, our partner … they call our industry. And they tell them, ‘Why are you investing in Europe? You should come over to the US.’ Calling German firms and Belgian firms in a very aggressive way — don’t invest in Europe, we have something better,” he said.

De Croo claimed that chemical and steel companies in Belgium had already been approached to take their business across the Atlantic.

Looking to the EU, De Croo said “our unity is our strength”. He also accused Washington of trying to bully the Netherlands into banning the export of chipmaking equipment to China.

Business leaders across the EU argue that the IRA threatens EU industries and that the reindustrialization of the United States should not bring about deindustrialization in Europe.

Olivier Joris, executive manager of the Federation of Enterprises in Belgium, called the US subsidies “a protectionist stab in the back from the Americans”. “What worries us is that the investments will be directed more toward the United States than to Europe because of these local content obligations,” he told the Belgian newspaper L’Echo.

According to Professor Bruno Colmant, member of the Belgian Royal Academy, Washington’s protectionist measures have shaken the EU industries. The United States, he wrote, has always had doctrines that suit its own interests. “Their multilateralism is an argument of circumstance.”

Recalling the global financial crises of 1971 and 2008, both of which started in the United States, Colmant said Washington never ends its wars or pays off its debts.

On his state visit to Washington in December, French President Emmanuel Macron warned that “the choices of the past few months, in particular the IRA, are choices that will fragment the West … we need to coordinate and re-synchronize our policy agendas”.

Paris is implementing the France 2030 investment roadmap to support the country’s ecological and economic transition, but since the outbreak of the energy crisis, the reindustrialization related to energy transformation and technological innovation has slowed down.

France is particularly dissatisfied with the “super aggressiveness” of the US industrial subsidy policy toward European companies.

Italian Economy Minister Giancarlo Giorgetti has called for a concerted EU response to the policy.

“Some Italian companies are considering moving production to the US following the IRA scheme, it would be a disaster,” he said.

Currently, a number of EU companies have expressed concerns about the new US tax incentives in the automotive and environmental sectors, which only apply to production in the United States, and thus discriminate against German companies and, according to experts, clearly violate World Trade Organization rules, said Volker Treier, head of foreign trade at the Association of German Chambers of Industry and Commerce.

Siemens Energy believes that a quick response from Europe’s economic policymakers to the US IRA is necessary to keep energy infrastructure capacity on the continent. “This is an absolutely critical time,” said Christian Bruch, Siemens Energy CEO.

Sweden-based electric vehicle battery maker Northvolt is considering delaying its plans to build a factory in Heide, northern Germany.