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European Commission President Ursula Von der Leyen delivers a speech at the 2023 World Economic Forum in Davos, Switzerland.

BENOIT DOPPAGNE/Belga/Sipa USA via Reuters Connect

What We’re Watching: EU's green subsidies, Vietnam’s leader canned, Bolivia's psychic cat hunter

To push back against IRA, EU plans its own green subsidies

It’s no secret the European Union has been unhappy with what it sees as unfair trade practices coming from Washington and Beijing. US President Joe Biden’s passage of the $369 billion Inflation Reduction Act, for example, offers consumer tax credits as well as incentives to US producers of green tech products that Europeans fear will put the continent’s manufacturers at an unfair advantage — perhaps even pushing them to relocate stateside. No wonder, then, that speculation has been rife over the possibility of the EU introducing its own subsidies in response. On Tuesday, European Commission President Ursula Von der Leyen told a Davos audience that the 27-member bloc will propose a Net-Zero Industry Act to mobilize EU support for green industries. Details will be hammered out at a summit in early February, but with the US investment so high, the EU’s commitment is expected to be big. The bigger questions are whether all these subsidies will be sustainable in the long term and if they will translate into lower prices that encourage EU consumers to buy more electric vehicles made in the bloc.

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