The 27-member bloc says it cannot compete with US tax breaks because it is linked to EU state aid.
French President Emmanuel Macron, who was in Washington this week for a state visit, described the subsidies as “overtly aggressive” and warned they could “divide the West.”
Macron and US President Joe Biden, however, pledged to work to not let the subsidies spark a larger trans-Atlantic trade dispute, even as Democratic lawmakers said they had no plans to make changes to the IRA.
In Germany, while Economy Minister Robert Habeck called for a “strong” response by Brussels to new US subsidies, Finance Minister Christian Lindner warned against engaging in a trade war with the US.
Pointing out that the German economy is closely linked to the US market, Lindner said Berlin “must rely on economic diplomacy” to protect its business interests.