After much foot-dragging, the European Commission proposed a cap on the price it will pay for natural gas yesterday. Fifteen of the union’s members had proposed such a cap to limit Russian energy revenues due to spiking gas prices since Moscow’s invasion of Ukraine, but a group of members led by Germany are opposed to it.
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.
As the remaining results of this week’s midterm congressional elections in the U.S. continue to trickle in, the EU’s leadership is assessing the outcome’s implications for the trans-Atlantic relationship, now that the opposition Republican Party appears on track to win back control of at least one, if not both, chambers of Congress.
