By Foo Yun Chee
BRUSSELS - The U.S. Inflation Reduction Act and soaring energy prices pose a risk to some of Europe's businesses, European Union antitrust chief Margrethe Vestager warned on Wednesday as the United States and European Union launched a task force on the issue.
U.S. President Joe Biden signed the $430 billion anti-inflation bill into law in August, which includes state aid for certain industries, such as the car sector.
The EU has said the new legislation, which makes tax breaks conditional on U.S-manufactured content, puts at a disadvantage European car companies and those producing a wide range of goods from the "green economy" sector including batteries, hydrogen and renewable energy equipment.
Vestager, who is a European Commission vice-president, said the issue was crucial for the 27-country bloc.
"We consider this a very important question. Because it is not just a question of some individual businesses also benefiting from the subsidies that is enabled by the Inflation Reduction Act," she told a European Parliamentary hearing.
"It is a combination of the energy crisis and the way that the Inflation Reduction Act is working that puts at risk part of the industrial base in Europe," Vestager said.
She emphasised the importance of finding a solution with the U.S. government.
"And I think there is an understanding on the U.S. side of things that this is a situation where they need to engage in full in order to find solutions," Vestager said.