On Sunday, European Commission President Ursula von der Leyen said the US and the EU should invest together in clean technology and not risk a devastating trade war.
Von der Leyen said in a speech at the College of Europe in Bruges that in the face of climate change and competition from China, "the United States and the European Union have a broad common interest in maintaining our industry leadership."
The EU's top official made an appeal to Washington as concerns grew in the West about Washington's latest historic $700 billion bill called the "Inflation Reduction Act".
The legislation guarantees tax breaks for American consumers who buy electric cars with batteries manufactured locally and in some countries that have free trade agreements with the US, although the EU and the United States are major trading partners, but they do not have such an agreement.
The EU, which includes many major automakers, fears that this will cause losses to its manufacturers, with some calling for a similar public investment policy in response.
Von der Leyen pointed out that the EU and the US would continue to work together to resolve the issue, but she warned that the bloc would respond as necessary to Washington's clean technology program.
She added that the United States and the European Union should invest together in "two clean energy industrial bases on both sides of the Atlantic," noting that the EU's usual strict public investment rules must be relaxed to do so.
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