COP27: U.S. in talks with EU on electric car tax credits

FILE PHOTO: A sign is pictured on an electric car charging station at the United Nations in Geneva

By Valerie Volcovici

SHARM EL-SHEIKH, Egypt (Reuters) - The United States is listening to the concerns of European counterparts about the trade tensions triggered by the Biden administration's clean vehicle subsidies tucked into the Inflation Reduction Act, the official overseeing the bill's implementation said on Wednesday.

John Podesta, appointed by President Joe Biden to oversee the rollout of the climate-related measures in the sprawling spending bill, told reporters at the COP27 climate summit that the United States is discussing and understands the concerns raised by European officials about the competitive disadvantage the bill's electric vehicle tax credits puts on its vehicle and battery manufacturers.

On Monday, German Finance Minister Christian Lindner said the United States has "not completely grasped how great our concerns about the consequences are" while French Finance Minister Bruno Le Maire said the law was a major threat to European companies and that the EU must stand firm against it.

"We are listening to their concerns," Podesta said on Wednesday. "We are in dialogue about the particular structure...of the vehicle credits that the Europeans have raised."

Biden signed in August the $430 billion legislation into law, which includes key tax credits tied to domestic manufacturing and wage requirements.

(Reporting by Valerie Volcovici; Editing by Lisa Shumaker)