EU Official Asks US To Equalize Tax Relief Treatment For European Electric Car Makers

Volkswagen is expected to receive the same tax treatment in the US. (photo: @volkswagen)

JAKARTA - EU and US officials will hold talks on Thursday and Friday, October 13-14 to discuss ways to give EU companies, including electric car makers, equal status to US companies in the US market.

This is to avoid what the EU calls discrimination against its producers by the US Inflation Reduction Act. This statement comes from a high-ranking EU official, 13 October.

The European Union complains that while it provides tax breaks or government subsidies for purchases of US electric cars such as Tesla, the United States makes such support dependent on certain cars, or parts thereof, made in the United States.

"Last month the Tesla Model Y was the most sold car in Germany," European Commission vice president Valdis Dombrovskis, who is responsible for trade, told a news conference.

"That wouldn't be possible without EU subsidies which are non-discriminatory, while EU electric cars don't get similar subsidies in the US, which is discrimination we want to address," Dombrovskis said.

EU car manufacturers, such as Volkswagen, are affected by US laws that cover a number of other products.

He said the problem also concerns various goods from the "green economy" sector, including batteries, hydrogen, and renewable energy equipment.

"There is a willingness to get involved on the US side in this," Dombrovskis said ahead of meetings on the matter with US Trade Representative Katherine Tai, US Commerce Secretary Gina Raimondo, and US Treasury Secretary Janet Yellen on Thursday and Friday.

"We hope we can resolve this issue before it becomes a dispute," he said. He also added that talks would focus on whether changes to the status of EU companies could be carried out through implementing US legislation, rather than having to send overall Inflation Reductions.