Sweden’s new trade chief sees ‘worrying’ aspects in US electric car tax credit

Sweden’s new trade chief sees ‘worrying’ aspects in US electric car tax credit

POLITICO — 2022-10-30

News from Brussels

Sweden is joining France and Germany in voicing concerns over the United States' new electric vehicle tax credit, and Stockholm will use its upcoming presidency of the Council of the EU to push to "improve" transatlantic relations on this matter, the new Swedish trade chief said.

In an interview with POLITICO on 30 October ahead of an informal trade ministers meeting in Prague, Johan Forssell, Sweden's newly appointed trade minister, said Stockholm shared the concerns of Berlin and Paris on the US Inflation Reduction Act, a new law that offers tax cuts and energy benefits to companies that invest on US soil and that incentivizes US. consumers to “buy American” when it comes to getting a greener car.

France and Germany have said the EU cannot remain idle in the face of the new American measures and should hit back if the incentives remain the same. French President Emmanuel Macron has already called for a "Buy European Act" to protect regional carmakers.

Forssell said he would "underline" those concerns with US Trade Representative Katherine Tai during a bilateral meeting set for Monday, on the sidelines of the EU meeting in Prague, which is likely to be dominated by the transatlantic row.

In the interview at the Swedish ambassador's residence in Prague, Forssell said Sweden will aim to do “what we can to improve the relationships between the EU and the US. At the same time … there are some elements in the Inflation Reduction Act that are worrying and they are not in accordance with WTO rules."

After the Czech Republic, Sweden is set to take over the presidency of the Council of the EU in January. The country will present its priorities for the presidency in a couple of weeks, but progressing on free-trade agreements with Australia, New Zealand, India and Indonesia will be high on Stockholm's agenda.

"Sweden has for many years been focusing on having a very free trade approach. … Having this open free trade, rule-based international trade is, of course, one of our main ambitions,” the trade minister said. 

Regarding China, the minister said the EU should continue "to strengthen [the bloc's] competitiveness and resilience." He said EU-Beijing relations should be conducted through a "dialogue with China" that "is in line with our overall interests."

"This will be one very important task during the presidency: to stand up for a very clear and firm position on China," he added. "China is moving in a direction that in some aspects is troublesome."