Every country needs an Inflation Reduction Act
Concerns about market distortion from the policy intended to stimulate investment in the energy transition and signed into law by President Joe Biden in August 2022 are easing. Other countries are realizing they need to adapt the blueprint.
MELBOURNE, Nov 23 (Reuters Breakingviews) - Lawmakers in South Korea blasted the U.S. Inflation Reduction Act as a betrayal. European Union leaders worried it would leave the bloc’s companies at a disadvantage. And big miners like Australia’s Fortescue said it left them little choice but to direct a lot of spending to the United States. Yet concerns about market distortion from the policy intended to stimulate investment in the energy transition and signed into law by President Joe Biden in August 2022 are easing. Other countries are realising they need to adapt the blueprint.
The Biden administration’s willingness to negotiate on its package of $370 billion of tax breaks and other measures has helped. That has mollified fears among major U.S. allies that the legislation’s push to boost manufacturing stateside would shut them out. Seoul lobbied hard with decent success, for example, to allow electric vehicles manufactured in South Korea and sold in the United States to be eligible for the IRA’s $7,500 tax credit. Australia struck a deal with Washington in May over critical minerals that paves the way for companies Down Under to gain access to the legislation’s financial be( article continues at Reuters )