Shapps issues warning on ‘dangerous’ US multi-billion dollar green subsidies
The Business Secretary said Joe Biden’s Inflation Reduction Act could mark a slide into protectionism.
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Your support makes all the difference.Business Secretary Grant Shapps has renewed criticism of President Joe Biden’s multi-billion dollar package of green subsidies, warning it could mark a “dangerous” slide into protectionism.
Speaking at the World Economic Forum (WEF) in Davos, Switzerland, Mr Shapps said he did not believe the 430 billion US dollar (£350 billion) Inflation Reduction Act (IRA) was intended to be protectionist but that could be the result if it was not amended.
His intervention comes after International Trade Secretary Kemi Badenoch wrote last month to her US counterpart complaining it would “harm multiple economies across the world”, impacting supply chains in batteries, electric vehicles and wider renewables.
The EU, Canada and South Korea have all previously warned the scheme – which includes tax credits for green technologies aimed at attracting investment to the US – is in breach of World Trade Organisation rules.
Mr Shapps, who was taking part in a panel discussion on the future of industrial policy, said the UK wanted global trade flows to be as open as possible.
That is where, at the edges, the Inflation Reduction Act in the US is dangerous because it could slip into protectionism
“We are great global traders. We want the world to be as open as possible. It is very, very important that we don’t slip into protectionism,” he said.
“That is where, at the edges, the Inflation Reduction Act in the US is dangerous because it could slip into protectionism.
“It’s not its intention, I don’t think it’s necessarily where it is going. But I think that’s where we have to be really careful.”
The latest transatlantic spat comes after US labour secretary Marty Walsh criticised the UK Government’s legislation imposing “minimum service levels” in the event of industrial action.
Speaking in Davos earlier this week, Mr Walsh said: “I would not support anything that would take away from workers.”
Downing Street retorted that the legislation did not inhibit the ability of unions to strike – whereas in the US, President Biden had taken action to stop a walkout by rail workers.