The EU and U.S. Are Squaring Off Over Climate Policy’s Trade Impact

Joe Biden promoting the Inflation Reduction Act
President Joe Biden sits in an electric vehicle at the Detroit Auto Show, in Detroit, Mich., Sept. 14, 2022 (AP photo by Evan Vucci).

Financial incentives for the purchase of electric vehicles included in the U.S. Inflation Reduction Act are leading to renewed trade frictions with the EU. While those tensions are significant in and of themselves, they mask deeper problems with how the IRA and climate legislation more generally fit into the global trade regime.

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