Concerned about the economy of Swabia: Will “Made in America” ​​trigger the next crisis?

With the Inflation Reduction Act, the United States wants to support domestic production in the future. Why this causes sharp criticism in Swabia.

In August, the US Congress passed legislative measures to combat inflation. The Inflation Reduction Act that was passed as a result aims to provide a tax break for the national entrepreneurial scene. A prerequisite for this is investment in the use of green energy with products from the United States. The latter condition caused an outcry in Europe, with accusations of economic protectionism being heard. There is significant concern that US businesses and consumers will reduce their import purchases as a result.

Is Swabia’s largest trading partner self-isolating?

Among other things, e-car buyers receive tax benefits if a certain percentage of the battery parts come from their country. “The ‘Blow Inflation Act’ is the latest example of the fact that Democrats also support ‘Made in America’,” explains Betty Crauser-Leinert, Head of International Business at IHK Schwaben. This could lead to competitive disadvantages for German companies in the most important export markets. “In the current difficult situation, further isolation must be avoided, which would have nothing but damage to all parties,” Krauser-Lehnert criticizes. Instead, it sees more free trade between the EU and the US as the right answer to global political turmoil.

The law must be changed

The European Union is already negotiating with the US government. But so far, the connection between Brussels and Washington is said to have been unsuccessful. “The challenge is of systemic importance. Especially in light of the energy crisis in Europe, there is a growing competitive challenge to our business location. The federal government and the European Union must therefore work with the United States to bring the IRA into WTO compliant or at least to obtain blanket exemptions for European companies.” Krauser-Lehnert warns. The creation of a “US-EU Working Group on Reducing Inflation Law” is therefore welcomed at IHK Swabia.