EU leaders seek to stand up to US and avoid trade war

BRUSSELS (AP) — European Union leaders on Thursday sought ways to stand up to the United States over its new green technologies plan that they say unfairly discriminates against Washington's best global ally when both should be standing shoulder to shoulder in their rivalry with Russia and China.

While the 27-nation EU argues the U.S. Inflation Reduction Act unfairly locks a longstanding friend out of the lucrative American market and excessively lavishes subsidies on made-in-America investments, it is now considering a huge subsidy program of its own to boost climate-friendly initiatives.

“We have to react with strength now,” French President Emmanuel Macron said as he headed into a year-end summit of EU leaders.

At the summit, leaders were seeking to counter fears that the EU was a waning industrial power sticking to free and open trade ideals while others jumped toward subsidies and protectionism to shield local industries during recession and tough economic times.

“We are in Europe, really, at the point where we risk to be de-industrialized,” Belgian Prime Minister Alexander De Croo said as he called for a common EU-plan to keep homegrown companies in the vanguard of green technologies that should drive the EU to become climate-neutral by 2050.

“We must boost European public investment to accelerate the energy transition,” European Commission President Ursula von der Leyen wrote to the leaders.

Without such an EU-wide plan, “we'd just be competing against one another, while the United States would be running away with everything,” De Croo said.

The EU's struggles to come up with a strategic investment plan came into focus because of the Inflation Reduction Act, a $369 billion investment plan that favors American-made climate technology through subsidies and tax...