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Emmanuel Macron and Joe Biden
Macron is using his rare US visit to air EU grievances concerning US subsidies to domestic productsImage: Andrew Harnik/AP/dpa/picture alliance

Biden welcomes Macron but subsidies row endures

December 1, 2022

Joe Biden has described France as Washington's "oldest ally." But Emmanuel Macron has warned that US subsidies for American products, signed by President Biden last summer, could divide the West.

https://p.dw.com/p/4KJlI

French President Emmanuel Macron was greeted by US President Joe Biden and a military honor guard at the White House on Thursday.

"France is our oldest ally, our unwavering partner in freedom's cause," Biden said in Washington, as he spoke of "the enduring strength and vitality of the great friendship between France and the United States of America."

Amid the war in Ukraine, Macron emphasized it was more important than ever to remain united.

"Our new frontiers are there, and it is our shared responsibility to respond to this," he said.

Tensions rise over US subsidies

But US-France relations are not steady on all fronts.

Macron is in Washington for his first state visit since Biden became president and is seeing it as an opportunity to air deep grievances over US-EU trade.

On Wednesday, Macron warned that newly introduced US subsidies could drive a wedge in European-American trade relations.

Speaking from Washington ahead of a meeting with US President Joe Biden, Macron was quoted as describing the subsidies as "super aggressive."

Biden signed the subsidies as part of the $430 billion Inflation Reduction Act last summer. The act promotes domestic energy production and clean energy.

The European Union argues that the tax breaks for US-made products put its own products at a significant disadvantage.

The 27-member bloc cannot compete with the US tax breaks, as it is tied by EU state aid.

Pledging to avoid trade dispute

Macron and Biden pledged to work not to let US subsidies spark an even larger transatlantic trade dispute.

Though Biden stressed he would not apologize for his country's steps to counter inflation, he said disadvantaging any US allies was never his intention and admitted to "glitches" in the long and complicated legislation.

"We agreed to discuss practical steps to coordinate and align our approaches so that we can strengthen and secure the supply chains, manufacturing and innovation on both sides of the Atlantic," Biden said in a joint news conference.

Macron addresses US Congress

He stressed that the common goal was for both the US and Europe to achieve self-sufficiency and independence form other nations' supply chains.

Macron, who had warned on Wednesday that the US subsides could "split the West," softened his tone after meeting Biden on Thursday. The French president acknowledged that the legislation's goal to transition to green energy was a "common objective" shared by Europe.

"We want to succeed together — not against each other," Macron said. He added that his talks with Biden focused on how to "resynchronize."

The two presidents failed to offer specific measures as to how to overcome the impasse but agreed to form a working group to address the issue.

Why is Macron's visit important?

Macron's statements come ahead of a day packed with activities with US counterpart Biden. On Thursday, the Macrons are expected for a state dinner at the White House, the first for a head of state since Biden's inauguration nearly three years ago.

The dinner is overseen by the first lady herself. It is part of the wider signs of amicable relations between the two countries, which Macron's visit aims to highlight.

Over 300 guests were invited for the White House dinner, designed with the colors red, white and blue at its center.

Jill Biden said the choice of color matched the colors of both countries flags "our common values, liberty and democracy, equality and fellowship.''

However, news reports ahead of the visit suggested Macron would use his time with Biden to air Europe's grievances regarding the US Inflation Reduction Act.

French President Emmanuel Macron whispers to U.S. President Joe Biden following their dinner at the G7 Summit in Elmau, Germany, June 26, 2022.
Macron is the first foreign leader to be given a state dinner by the Biden White HouseImage: Susan Walsh/AP Photo/picture alliance

While Europe is aware that any major revision of the subsidies is out of the question, officials hope to secure exemptions similar to those granted to Mexico and Canada.

rmt/sms (AFP, Reuters)

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