Mon. Apr 22nd, 2024

Prof. ST Hsieh

Director, US-China Energy Industry Forum


[email protected]

November 22, 2022

The global economy needs fair trade! The best way for achieving “fair trades” is through bilateral and multilateral consultations. Of course, it takes leadership, wisdom, and patience. Unfortunately, many politicians, with limited endowment, take the “trade war” approach. It usually means that they “attack” first, then negotiate later with the perceived “enemy.”

But it is impractical to label one party as the common enemy imposing export control for an entire trading block and demand collective actions from allies. Afterall, “each tub has its own bottom,” in today’s’ diversified world, each nation has her niche and responsible for the well beings of her people/businesses.

The US President Trump started, in 2016, the America Fist, America Energy Dominance and President Biden claimed that “the US is back (to global stage and ready to lead!) in 2021. As the global economy already weakened by the US trade wars followed with three years of COVID-19 global pandemic, the 10th month old Ukraine war has plunged Europe into an economic disaster for years to come, it is natural for European nations to declare “trade independence” from the US.

France Accuses US of Pursuing China-Style Industrial Policy

William Horobin and Arne Delfs

Tue, November 22, 2022 at 7:58 AM

(Bloomberg) — French Finance Minister Bruno Le Maire said Joe Biden’s climate law shows the US has adopted an industrial policy that echoes a Chinese model of major subsidies to boost domestic production.

The European Union, which is sending a taskforce to Washington next month to lay out its concerns over the Inflation Reduction Act, must look at all options to defend its own industry, he said at a news conference in Paris alongside German Economy Minister Robert Habeck.

“We’ve tipped into a new globalization,” Le Maire said. “China tipped into this globalization a long time ago with massive state aid exclusively reserved for Chinese products. Right before our eyes, the US has tipped into this new globalization to develop its industrial capacity on US soil.”

The US law came into force in August, offering billions of dollars in incentives for renewable energy companies. It provoked concerns in Europe over the cumulative impact of some measures on industry, including the threat of luring away investment.

The French and German ministers agreed on the need to strengthen European industry if authorities on both sides of the Atlantic fail to reach a compromise. The EU needs to act more quickly and decisively, Habeck said.

French President Emmanuel Macron, who has called for a so-called Buy European Act, will raise the issue during a state visit to Washington next week. German Chancellor Olaf Scholz told a business conference in Berlin on Tuesday he was in talks with Biden about the distorting effects of the US measures and suggested the EU should increase its own state subsidies.

Macron to Urge Businesses to Pick Europe Over US for Investment

Ania Nussbaum and William Horobin

Mon, November 21, 2022 at 1:53 AM

(Bloomberg) — Emmanuel Macron will host a dinner with top European business leaders on Monday to urge them to invest at home as the French president tries to counter the lure of new climate laws that may boost the appeal of the US.

“We will remind them that we are going to Washington in a few days and we are going to defend French and European interests in the face of the Inflation Reduction Act, that is the American legislation that allows for the exclusive defense of American companies,” French Finance Minister Bruno Le Maire told France Inter radio.

Macron has criticized Joe Biden’s climate laws over concerns billions of dollars in incentives for renewable energy firms, combined with lower energy prices, may influence investment decisions. He has pledged to raise the issue during a state visit to the US at the start of next month.

Le Maire will meet with his German counterpart, Christian Lindner, in Paris on Monday to discuss how to coordinate a response to US energy policies and align aid to companies struggling with higher power prices.

Dutch Resist US Call to Ban More Chip Equipment Sales to China

Diederik Baazil

Tue, November 22, 2022 at 9:38 AM

(Bloomberg) — The Netherlands will defend its economic interests when it comes to the sales of chip equipment to China, a senior Dutch official said, further evidence of the country’s resistance to meekly following Washington’s attempts to cut off China from semiconductor technology.

The European country is home to ASML Holding NV, which dominates the market for one-of-a-kind, cutting-edge chipmaking equipment that has become a focus of the US government’s attempts to limit China. Dutch Foreign Trade Minister Liesje Schreinemacher told lawmakers on Tuesday that the Netherlands will make its own decision regarding ASML’s chip gear sales to China amid trade rule talks with the US and other allies.

Schreinemacher’s comments appeared to indicate growing Dutch objections to the US call for the Netherlands to align with Washington on export controls to undermine Beijing’s ambition in building a chip industry at home and improve its military capabilities. The European country wants to maintain access to China as a major market.

Last week, the Dutch minister said the US shouldn’t expect the Netherlands to unquestionably adopt its approach to China export restrictions.

The Netherlands is key to the struggle because ASML is one of a handful of companies that dominate the market for semiconductor-manufacturing equipment. Its peers include Applied Materials Inc., Lam Research Corp. and KLA Corp. in the US, and Tokyo Electron Ltd. in Japan.

EU negotiators are working on a number of contentious trade issues with Washington. Countries, most vocally France, have said the measures could damage European economies and have raised the possibility of filing a complaint with the World Trade Organization.

Meanwhile, China is working to ensure other countries don’t cave to US demands. In a Group of 20 summit meeting last Tuesday, Chinese President Xi Jinping urged Dutch Prime Minister Mark Rutte to avoid disrupting global trade.

“We must oppose the politicization of economic and trade issues and maintain the stability of the global industrial chain and supply chain,” Xi told Rutte. The Dutch leader also visited South Korea last week to discuss tech issues and deepen chip ties.

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