London Daily

Focus on the big picture.
Tuesday, May 26, 2026

Trade war averted? Macron gets Biden to ‘tweak’ his industrial subsidies

Trade war averted? Macron gets Biden to ‘tweak’ his industrial subsidies

The US president conceded there were ‘glitches’ in the roll-out of America’s multi-billion-dollar package of green subsidies.
French President Emmanuel Macron snatched an unexpected win from his U.S counterpart during a visit to Washington on Thursday, getting Joe Biden to suggest that European companies could benefit from a controversial American subsidies package.

Fury has been boiling over in Europe after it became clear that Biden's Inflation Reduction Act — a $369 billion package for green industry — could drain investment out of the EU and into the U.S. Big car-making nations like France and Germany had complained that the U.S. law was potentially illegal for discriminating against foreign companies in the electric vehicle sector and encouraging consumers to "Buy American."

Macron’s visit to the U.S. had been trailed as a doomed last-ditch effort to secure a truce over Washington's largesse before the EU and U.S. would lurch into a subsidy race or full-blown trade war with countervailing tariffs.

Europeans have been pressing to receive the same rights as Mexicans and Canadians to benefit from the green cash bonanza, but with little prospect of success. For weeks, the French have been campaigning for European partners to agree to their own rival subsidy package, including a “Buy European” component.

At an affable news conference with Macron on Thursday, however, Biden conceded way more ground than had been thought possible.

"There's tweaks that we can make that can fundamentally make it easier for European countries to participate and, or be on their own, but that is something that is a matter to be worked out," the American president said. "I never intended to exclude folks who were cooperating with us. That was not the intention. We're back in business, Europe is back in business. And we are going to continue to create manufacturing jobs in America, but not at the expense of Europe."

That question of excluding Europe has been one of the major bones of contention. At a time when Europe has been paying dramatically higher energy prices than the U.S., many Europeans have seen the Inflation Reduction Act as a hostile attempt to profit from European weakness.

Several top European officials have been arguing that the EU and U.S. need to join forces against China instead of competing against each other.

That logic seemed to make headway with Biden. While making "no apology" for legislation that he said was vital to creating U.S. jobs, he noted that parts of the IRA could need a fix. "There's obviously going to be glitches in it and [we] need to reconcile changes in it," he said.

He said exemptions had been made for companies that had free-trade agreements with the U.S. but suggested that this should be extended more generally to "allies."

"There's a lot we can work out," he continued.

Macron also seemed bullish about the way things unfolded.

“We had a very good discussion on the IRA and we decided to synchronize our approaches ... as well as our investments, because we share the same strong will to secure our industries,” said Macron.

It still remains to be seen, however, how much can be achieved in practice and whether Biden was making more concessions in his friendly public appearance with Macron than he will really be able to deliver. He will, for example, be likely to face hostility in Congress over attempts to go back and fiddle with such a landmark initiative as the IRA.

It’s unclear how far Biden's administration will go in resolving issues for the Europeans at a technical level, as teams on either side still need to hash out the details. The U.S. president said the two leaders had agreed to allow their teams to "follow up” on their decisions.

This passes the small print to an EU-U.S. taskforce in charge of leading talks on trying to resolve differences on the package, but EU officials have expressed doubt concerning how much progress can be made at this level.

For the French, Biden’s unexpected concession paradoxically risks undermining Macron’s campaign at home to get the EU to roll out its own protectionist answer to the IRA.

Ahead of the visit, an adviser to Macron was briefing the press that the answer to the IRA “ultimately lay in Europe’s capacity to show it can enter the competition … and that’s the ‘Buy European Act.’”

France’s Finance Minister Bruno Le Maire is set to continue trade discussions with U.S. officials on Friday.
Newsletter

Related Articles

0:00
0:00
Close
'They're people from all walks of life across the UK'
EU Digital ID Claims Misstate What Brussels Can Legally Force on Member States
The Great Western Exit: Why Best Citizens Are Fleeing the Rich World [PODCAST]
The New Robber Barons of Intelligence: Are AI Bosses More Powerful Than Rockefeller?
The End of the Old Order [Podcast]
Britain’s Democracy Is Now a Costume
The AI Gold Rush Is Coming for America’s Last Open Spaces [Podcast]
The Pentagon’s AI Squeeze: Eight Tech Giants Get In, Anthropic Gets Shut Out [Podcast]
The War Map: Professor Jiang’s Dark Theory of Iran, Trump, China, Russia, Israel, and the Coming Global Shock [Podcast]
Labour Is No Longer a National Party [Podcast]
AI Isn’t Stealing Your Job. It’s Dismantling It Piece by Piece.
Lawyers vs Engineers: Why China Builds While America Litigates [Podcast]
Churchill’s Glass: The Drunk, the Doctor, and the Myth Britain Refuses to Sober Up From
Apple issues an unusual warning: this is how your iPhone can be hacked without you doing anything
Kennedy’s Quiet War on Antidepressants Sparks Alarm Across America’s Medical Establishment
The Met Gala Meets the Age of Billionaire Backlash
Russian Oligarch’s Superyacht Crosses Hormuz via Iran-Controlled Route
Gunfire Disrupts White House Correspondents’ Dinner as Trump Is Evacuated
A Leak, a King, and a Fracturing Alliance
Inside the Gates Foundation Turmoil: Layoffs, Scrutiny, and the Cost of Reputational Risk
UK Biobank Breach Exposes Health Data of 500,000, Listed for Sale on Chinese Platform
KPMG Cuts Around 10% of US Audit Partners After Failed Exit Push
French Police Probe Suspected Weather-Data Tampering After Unusual Polymarket Bets on Paris Temperatures
CATL Unveils Revolutionary EV Battery Tech: 1000 km Range and 7-Minute Charging Ahead of Beijing Auto Show
Crypto Scammers Capitalize on Maritime Chaos Near the Strait of Hormuz: A Rising Threat to Shipping Companies
Changi Airport: How Singapore Engineered the World’s Most Efficient Travel Experience
Power Dynamics: Apple’s Leadership Shakeup, Geopolitical Risks in the Strait of Hormuz, and Europe's Energy Strategy Amidst Global Challenges
Apple's Leadership Transition: Can New CEO John Ternus Navigate AI Challenges and Geopolitical Pressures?
Italy’s €100K Tax Gambit: Europe’s Soft Power Tax Haven
News Roundup
Microsoft lost 2.5 millions users (French government) to Linux
Privacy Problems in Microsoft Windows OS
News roundup
Péter András Magyar and the Strategic Reset of Hungary
Hungary After the Landslide — A Strategic Reset in Europe
Meghan Markle Plans Exclusive Women-Focused Retreat During Australia Visit
Starmer and Trump Hold Strategic Talks on Securing Strait of Hormuz Amid Rising Tensions
Unofficial Australia Visit by Prince Harry and Meghan Expected to Stir Tensions with Royal Circles
Pipeline Attack Cuts Significant Share of Saudi Arabia’s Oil Export Capacity
UK Stocks Rise on Ceasefire Momentum and Renewed Focus on Diplomacy
UK to Hold Further Strategic Talks on Strait of Hormuz Security
Starmer Voices Frustration as Global Tensions Drive Up UK Energy Costs
UK Students Voice Concern Over Proposal for Automatic Military Draft Registration
Rising Volatility Drives Uncertainty in UK Fuel and Petrol Prices
UK Moves to Deploy ‘Skyhammer’ Anti-Drone System to Strengthen Airspace Defense
New Analysis Explores UK Budget Mechanics in ‘Behind the Blue’ Feature
Man Arrested After Four Die in Channel Crossing Tragedy
UK Tightens Immigration Framework with New Sponsor Rules and Fee Increases
UK Foreign Secretary Highlights Impact of Intensified Strikes in Lebanon
UK Urges Inclusion of Lebanon in US-Iran Ceasefire Framework
×