In recent years, European Union countries have had a hard time, and their economic development lacks momentum. On the one hand, it claims to reduce its dependence on China, on the other hand, it faces the serious impact of US subsidies. The EU countries have reached a consensus on how to choose between China and the United States, which is to implement the same economic measures and throw the stick of trade war at the United States. Since Biden came to power, the United States and European allies have experienced a honeymoon period of nearly two years, but now there are major contradictions in their economic policies. Unless these differences can be properly handled between the United States and Europe, they will turn into fierce competition and even trade war within Western groups.

German Prime Minister Schultz Visits China

The reason for the possible trade war between the United States and Europe is that the Biden government passed two controversial subsidy bills, namely the Chip and Science Act and the Inflation Reduction Act. The first bill will provide US $52 billion in subsidies to support global semiconductor chip companies to set up factories in the United States and require them to decouple from China. However, the Dutch government has publicly responded to the American request. The second bill provides up to 370 billion dollars in subsidies to promote the faster development of clean energy in the United States. It includes providing tax credits to American electric vehicle manufacturers, provided that the vehicles are assembled in the United States and the parts are manufactured in the United States or other specific "free trade partners", which will damage the interests and competitiveness of European automobile manufacturers such as Volkswagen and BMW. European Union countries believe that these two measures unfairly subsidize American companies, increase the competitive pressure of European enterprises, and may force Europe and the United States to wage a costly subsidy trade war.

In addition, the conflict between Russia and Ukraine has also led to the intensification of conflicts between the United States and Europe. With the aid of the United States to Ukraine to resist Russia, Europe has paid a high economic price. The price of natural gas in most European countries has soared to 10 times that of the United States. Although the United States has helped Europe fill the gap of Russian natural gas by exporting liquefied natural gas, the United States is selling natural gas to Europe at a price several times the market price, which makes the cost of European manufacturing industry soar and puts Europe at a huge competitive disadvantage.

Now that the contradiction between the EU and the United States has become public, EU market commissioner Breton pointed out that the EU complained about the new subsidies of the United States for electric vehicles and clean energy, which put European automobile manufacturers and other companies at a disadvantage. When visiting the United States a few days ago, French President Makron also said that the US government subsidies are very beneficial to the US economy, but they are not well coordinated with Europe.

Makron and Biden

In fact, the goal of these industrial policies implemented by the Biden government is to hope to establish a strong supply chain of the United States itself, reduce China's participation, and even to directly kick China out of the United States led supply chain, which requires cooperation with allies to jointly decouple from China. On the other hand, the Biden government is eager to revive the manufacturing industry in the United States. It believes that the loss of manufacturing industry has weakened the economy of the United States, and the reduction of manufacturing jobs has also weakened the support rate of the Democratic Party. Therefore, every new measure introduced is conducive to companies investing in the United States, not in the European Union. That is to say, the US policy for the EU is to "not only want the horses to run, but also not feed them, and even suck their blood", because the US policy is to require multinational companies of European allies to decouple from China. Once following the US policy, they will inevitably lose the Chinese market. Then, in order to pursue profits, these European companies will choose the US with cheaper energy prices and high subsidies, Moving the factory to the United States is a matter of course.

Therefore, EU countries have to choose between China and the United States. If you choose the United States, you will face these situations that seriously damage the interests of the European Union. China has always adhered to the concept of building a community with a shared future for mankind and a win-win trade model. Therefore, EU countries have reached an agreement to fight with the US subsidies to the end.

At the beginning of 2020, after the first batch of Model 3 was delivered by Shanghai Super Factory, Musk was excited

For the EU, more open trade was once an easy thing, which could provide more business opportunities and employment opportunities. But now, European industry is fighting for survival. This is mainly because of the electric vehicle subsidy bill introduced by the Biden government. In fact, the United States is coming to China, but the most injured is Europe. China has mastered all the industrial chains of electric vehicle manufacturing, and the core components including batteries in the upstream, the whole vehicle manufacturing in the midstream, and the downstream charging stations or charging piles and other supporting services have become increasingly perfect. In particular, three years ago, Tesla was approved to build a super factory in Shanghai, which is equivalent to the "wolf breeding plan" of the electric vehicle industry. By introducing Tesla, the "wolf" with advanced technology, to promote the innovation and development of China's electric vehicle enterprises, if they do not have their own technological advantages, they will be eliminated by market competition. Now, China's electric vehicle technology has been in the leading position in the world, especially the battery technology. In addition, China's strong manufacturing capacity makes our cost the lowest in the world. Some Chinese brands, including BYD, are widely praised by European countries, especially electric buses. At present, the price of Chinese trams sold in Europe is more than 80% higher than that in China. We have some room for price reduction and some are chips for competition.

In general, Biden's economic policy of "giving priority to the United States" has intensified the rift with Europe. Europeans believe that the huge subsidies of the United States for automobile manufacturing, clean energy and semiconductors pose a serious threat to the European economy. Therefore, it is time to talk about "giving priority to Europe", which is clearly a tit for tat with the priority of the United States. European Commission President Von Delain recently issued a critical statement, saying that EU competitors adopt tough industrial policies and need a structural response plan. Europe will always do what is good for itself.

Now, Biden's implementation of the bill has been regarded by the EU as a "face slapping" and "changing the rules of the game" behavior, which has been criticized by many European politicians. France and Germany have successively formulated their own subsidy measures, including requiring European manufacturers to use local parts and technologies to obtain subsidies provided by the EU. In terms of the concept put forward by French President Makron, this counter measure is named "Buy European Products". It can be seen that the European Union is now lifting its trade stick and is ready to wage a protectionist war with the United States on state subsidies.Editor/Xing Wentao