The US bows to the EU, begging for access to green technologies

Good morning. The number of protesters condemning the pension reform of French President Emmanuel Macron is declining, but he can hardly be glad that only 450,000 people cursed his name in Paris yesterday. Meanwhile, garbage continues to accumulate.

Today, our Trade High Representative brings you inside information about what the US is willing to share with the EU from its $369 billion green subsidy, and the head of EU competition tells us that big tech wants to avoid EU rules by pretending to be small. .

Heavy metal

A long-awaited deal on how EU battery makers can access US subsidies has finally closed. writes Andy Bounds.

Washington has proposed making five minerals used in batteries eligible for subsidies under the Inflation Reduction Act, which promotes cleaner technology, if mined or processed in the EU, according to people familiar with the talks.

Context: The IRA has provided about $369 billion in greenback subsidies, offering things like tax credits for electric vehicles. But battery components must come from countries with which the US has a free trade agreement in order to comply, leaving European and European companies fearful they will lose out.

US President Joe Biden promised EU Commission Chair Ursula von der Leyen a deal during her visit to the White House earlier this month.

The five metals subject to the IRA are cobalt, graphite, lithium, manganese and nickel, which are used in battery manufacturing. The US is expected to join the EU’s “critical minerals club”, a brand that Brussels wants to use for its global partnerships in the sector.

But it looks like the EU is not the only friend with benefits.

Signed in Japan agreement with the US yesterday by lowering tariffs on the same five minerals.

Yasutoshi Nishimura, Japan’s minister of economy, trade and industry, said the trade deal would likely result in an agreement that the same metals that are processed in Japan would be eligible for IRA tax credits.

Washington is expected this week to announce its full guidance on the implementation of the IRA.

EU automakers already have one small victory. The US has agreed that customers using leasing deals to buy European-made electric vehicles can receive a tax credit under the IRA, which was previously limited to vehicles assembled in North America.

And Brussels officials say they are still hoping for further concessions at the eleventh hour.

Chart du jour: Change of generations

One way to deal with an aging population is to make the young pay more to support the old. Spain has opted for a pension reform that increase the burden on the working population instead of cutting pensioner benefits.

Silent game

For EU Competition Commissioner Margrethe Vestager, size is everything.

The woman with the power to regulate big tech has accused players like Apple and Amazon of downplaying its size or using other tactics to play EU tech rules to their advantage. writes Javier Espinoza.

Context: EU regulators have been working for years on a set of new technology laws designed to open up markets and make the Internet a safer place for citizens. The rules for large technology companies under the Digital Services Act and the Digital Markets Act are stricter than for smaller companies.

Some major online platforms have so far not disclosed the exact number of their users in Europe, a key metric that determines whether they must comply with additional obligations under the DSA, which aims to regulate how big tech should control hate speech or illegal content.

Vestager told the FT that all of a sudden, companies like Google and Microsoft “felt very small.”

Her warning came after Thierry Breton, EU commissioner for the internal market and in charge of digital policy, said Brussels would pursue companies that do not disclose their numbers.

While Apple and other major U.S. platforms have provided numbers that would get them into the scope, it’s understandable that a few companies are still resisting the commission.

Vestager is adamant that the EU will take over the big tech groups. “It’s not easy, but they are not scammers. They are part of the system,” she said. “It’s a union built on the rule of law, and that’s the foundation.”

The Commission has an “open door” policy whereby companies can ask questions to clarify compliance with the DMA, another landmark piece of legislation aimed at curbing the power of big tech.

Vestager hinted that tech companies are using the system to their advantage to delay proper enforcement of the rules — for example, by having their lawyers ask the obvious questions. “We answer ‘hard’ questions because we think DMA is clear and easy enough. [But] it takes a lot of paid hours to understand what that really means.”

She acknowledged that it’s one thing to pass a law and another to enforce it, especially when the big tech companies seem to be playing dumb.

“Of course, getting businesses to change their culture, their business models will not be easy,” she added.

What to see today

1. European Parliament starts two-day work plenary session.

2. Ursula von der Leyen meets with Kenyan President William Ruto.

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