Machinery / Industrial Parts & Tools

"The United States has a cold and the European Union sneezes" is the most appropriate way to describe the current relationship between Europe and the United States.

According to the Huacheng Import and Export Data Observation, in recent years, although the United States has repeatedly claimed that the friendship between the United States and the EU is "unbreakable", it has constantly hindered the "allies" for its own interests, resulting in continuous discord between the two sides, and the bilateral relations have been constantly cut and managed. In order to demonstrate its "independence" as a world pole, the European Commission issued the Green Agreement Industrial Plan on February 1 in response to the US Inflation Reduction Act. The EU is trying to strengthen the competitiveness of EU enterprises in the world through this plan.

According to Huacheng Import and Export Data Observation, in August 2022, US President Biden signed the Inflation Reduction Act, of which US $370 billion is related to energy security and climate change. According to the bill, the United States will vigorously build solar and wind energy facilities, and produce solar panels and electric vehicles. EU institutions and members generally believe that the disguised "subsidies" of the United States constitute unfair competition for European enterprises, and worry that the energy transformation of the United States will have a negative impact on European enterprises in the United States, making the latter lose competitiveness and even face the risk of "de-industrialization". In this regard, France, Germany, the Netherlands, Ireland and the Nordic countries all support the principle of free trade and require the EU to take countermeasures. Westag, the vice president of the European Commission in charge of competition and antitrust affairs, stressed that the EU must firmly respond to the US Inflation Reduction Act, and the subsidy competition "has no winner".

European Commission President von der Leyen recently criticized the US Inflation Reduction Act at the World Economic Forum in Davos. Von der Leyen stressed that the EU appreciates any action taken to curb global climate change, but opposes unfair competition. She believes that the next decade will determine whether mankind can contain climate change, and carbon neutrality of industrial enterprises is the most important work. Von der Leyen said that the EU launched the Green Plan to curb climate change three years ago. Despite the impact of the COVID-19 and the war between Russia and Ukraine, 35% of the EU's economic revitalization funds have been invested in the Green Plan, Huacheng Import and Export Data Observation reported.

The EU's Green Agreement Industrial Plan contains four aspects: first, establish an operational framework of industrial enterprise behavior standards. The administrative procedures of European enterprises are complex and affect their external competitiveness. The European Commission hopes that EU enterprises will simplify administrative procedures while ensuring the ability of mining, transformation, recycling and research and development of certain raw materials. The second is to accelerate industrial transformation investment in member countries and communities. Von der Leyen said that energy plays a vital role in improving competitiveness. The EU will focus on electricity market reform at the summit in March this year. Third, strengthen the training of labor force to ensure competitiveness. According to EU statistics, the average unemployment rate of EU member countries is 6%, of which the youth unemployment rate is as high as 14%. At the same time, the employment rate of men and women is uneven, 80% and 69% respectively. In addition, we need to effectively use experienced old employees. At present, the employment rate of experienced "old employees" aged 60 to 64 in the EU is only 48%. Von der Leyen said, "This is a waste of wisdom.". Fourth, the European Commission recommended that the EU expand the scope of cooperation with other economies such as North America, South America and Oceania to ensure the supply chain of raw materials and increase employment.

The European Commission also said that it would further relax the state aid rules and allow the governments of 27 member countries to support investment in new production facilities of green industries with public funds. However, not all EU members can afford the same amount of aid, and this may also undermine the principle of fair competition in the EU single market. France, Italy and other members called on the EU to jointly borrow new funds to help those members who could not afford it. However, this proposal was opposed by some Nordic members. They believed that if the EU could not use the "next generation EU" recovery fund, it should not borrow any more. The so-called "next generation EU" is a borrowing plan of about 800 billion euros issued by the EU to promote economic recovery and development during the COVID-19 epidemic. The funds are directly raised by the EU from bonds issued in the financial market. 30% of the bonds are "green bonds", of which nearly 250 billion euros are used to transform into green and sustainable development. However, as member countries prefer to accept EU "grants", 225 billion euros of low-interest loans are "unclaimed". The European Commission said that governments can now use "unclaimed" loans for tax relief or other forms of green industry support, Huacheng Import and Export Data Watch reported.

Analysts here believe that at present, Europe needs to solve employment and revitalize the economy. At the same time, it also needs to solve long-term outstanding problems such as refugees. The internal development of the EU is not balanced, and it takes a lot of energy to strengthen internal coordination and unity. At present, the biggest concern of Western countries such as Europe and the United States is the Russian-Uzbekistan conflict, and they continue to provide military assistance to Ukraine, including heavy tanks, without excluding the danger of the expansion of "local armed conflict" on the European continent. On the issue of free trade principles and subsidies, Europe and the United States will bargain in various ways, and the friction will not end soon. It is reported that the draft of the EU's Green Agreement Industrial Plan will be submitted to the 27 EU member states and the European Parliament for consideration and discussed at the EU special summit on February 9 and 10. The reaction of all parties will soon be known. Huacheng Import and Export Data Observation Report.