The Daily 202 has repeatedly flagged concerns from some of America’s dearest friends about the hundreds of billions of dollars in the Inflation Reduction Act and the CHIPS law to attract manufacturing of electric vehicles and microchips to America (and away from China, notably). That’s because the incentives could pull business from other Asian countries and Europe.
This isn’t an academic issue. While it’s probably too early to sound the “trade war” alarm, at least for now, Europe on Wednesday unveiled a plan to counter the IRA’s $370 billion in subsidies, notably by lifting limits on state aid, to keep or attract capital investments.
Philip Blenkinsop of Reuters reported: “European Commission chief Ursula von der Leyen announced, as part of the plan, a repurposing of existing EU funds, faster approval of green projects and drives to boost skills and to seal trade agreements to secure supplies of critical raw materials.”
“’Major economies are rightly stepping up investment in net zero industries,’ von der Leyen told a news conference. ‘What we are looking at is that we have a global playing field.’”
European leaders worry the combination of soaring or unusually volatile energy prices on the continent (partly because of the war in Ukraine) and American incentives to attract investment could cripple the continent’s manufacturing base.
European Commission vice-president Margrethe Vestager recently told the Financial Times: “When combined with stable, cheap energy prices in the US, the IRA could have a ‘toxic’ effect on some European industries.”
From ‘tweaks’ to ‘hell’ no
When French President Emmanuel Macron made a state visit to the United States in December, he warned Biden’s legislative achievements might “fragment the West” and dry up transatlantic investment unless the two sides reconcile their differences over green-energy subsidies.
At the time, Biden sounded a conciliatory note, saying he “never intended to” freeze out allies and declared “there’s tweaks that we can make” to address the dispute.
Fast forward to Jan. 26, and a Biden speech to one his favorite kinds of audiences: union members.
“You see I’m getting criticized internationally for my maybe focusing too much on America? The hell with that!” the president said. (hat/tip to Bloomberg’s Justin Sink and Josh Wingrove for leading with Biden’s defiant exclamation.)
At the New York Times, Ana Swanson reported last week that changes will be hard to nail down … by design.
“The United States and European Union have been searching for changes that could be made to mollify both sides before the U.S. tax-credit rules are settled in March. But the Biden administration appears to have only limited ability to change some of the law’s provisions. Members of Congress say they intentionally worded the law to benefit American manufacturing,” she reported.
My colleague Maxine Joselow, who pens the excellent Climate 202, zeroed in last week on one headache: To qualify for the full incentive, a vehicle’s battery components must have been made in North America and also “contain at least 40 percent critical minerals from the United States or a country with which the United States has a free-trade agreement.”
One of the IRA’s key authors, Sen. Joe Manchin III (D-W.Va.) recently unveiled legislation to prevent the Treasury Department from granting tax credits to companies that don’t meet the criteria.
Manchin recently said “that he didn’t realize the European Union lacked a free trade agreement with the United States when he crafted the new requirements for the EV credits,” Maxine noted.
American car companies worry, Maxine underlined, “because the main minerals used in EV batteries — lithium, cobalt, graphite and nickel — primarily come from countries that aren’t parties to U.S. free trade agreements, such as China, Russia, Indonesia and the Democratic Republic of Congo.”
The March timetable means any fix will require officials to put the pedal to the metal.
Lighthearted aside: Has any modern American president publicly used the word “hell” more often and in more ways than this one? Sure, former president Donald Trump used the word quite a bit. Former president Barack Obama did, sometimes, too, often quoting other politicians.
This isn’t prudishness — salty language has a rich West Wing heritage, including one hall-of-fame entry from Biden himself. (Though he’ll never be Lyndon Johnson.)
With Biden, it can be appreciative: “Chuck, you’ve done a hell of a job.” To signal the scale of what he’s done: “you’re going to be able to pay a whole hell of a lot more bills.” Or emphatic astonishment: “I wonder how the hell my parents did it.” Or for self-deprecation, like the time he said of his own remarks: “This is boring as hell, I know.” Or knock Republicans: “Who in the hell do they think they are? Excuse my language.”
Biden is hell-a versatile.
See an important political story that doesn’t quite fit traditional politics coverage? Flag it for us here.
First sweeping federal gun crime report in 20 years released
“The most expansive federal report in over two decades on guns and crime shows a shrinking turnaround between the time a gun was purchased and when it was recovered from a crime scene, indicating firearms bought legally are more quickly being used in crimes around the country,” the Associated Press’s Lindsay Whitehurst reports.
- “It also documents a spike in the use of conversion devices that make a semiautomatic gun fire like a machine gun, along with the growing seizure of so-called ghost guns, privately made firearms that are hard to trace.”
Pelosi to back Schiff for California Senate seat if Feinstein doesn’t run
“Former House speaker Nancy Pelosi (D-Calif.) on Thursday threw her support behind Rep. Adam B. Schiff (D-Calif.) in what is shaping up as a competitive 2024 Senate race in California if Sen. Dianne Feinstein (D-Calif.) chooses not to run,” John Wagner reports.
Biden announces departure of Brian Deese from top economic job
“President Biden on Thursday publicly confirmed that Brian Deese, the director of the National Economic Council, is leaving the top economic position in the White House,” John Wagner reports.
College enrollment stabilizing after years of steep declines, data show
“An influx of freshmen in the fall has helped narrow enrollment declines at colleges and universities across the country, but the total head count for all of higher education was still 5.8 percent below 2019 levels, according to a National Student Clearinghouse Research Center report released Thursday,” Danielle Douglas-Gabriel reports.
Lunchtime reads from The Post
TikTok launches charm offensive amid calls to ban the app
“The opening of the transparency center comes as TikTok is fighting off calls from lawmakers to ban the app, the latest coming from Sen. Michael F. Bennet (D-Colo.), who in a letter to the CEOs of Apple and Google demanded that it be removed from their companies’ app stores. There was no immediate response from either company,” Taylor Lorenz reports.
- “TikTok announced the creation of transparency centers in Los Angeles, D.C. and Singapore in 2020, just before the onset of the coronavirus pandemic. But they remained closed to visitors until Tuesday, when the Los Angeles center offered a tour to journalists.”
Who’s sending what to Ukraine: A new wave of Western weapons explained
“From tanks to air defense systems, the U.S.- and European-made weapons are expected to complement or replace largely Soviet-era technology in use by Ukrainian forces and allow them to use ammunition manufactured in the West. The deliveries could provide a significant advantage to Kyiv, though experts warn that technical and logistical hurdles still must be overcome,” Ellen Francis, Adam Taylor, Samuel Granados and Naomi Schanen report.
Click through for a guide to some of the key weapons and vehicles that Ukraine’s allies have recently agreed to send.
Ukraine can’t retake Crimea soon, Pentagon tells lawmakers in classified briefing
“Ukrainian forces are unlikely to be able to recapture Crimea from Russian troops in the near future, four senior Defense Department officials told House Armed Services Committee lawmakers in a classified briefing. The assessment is sure to frustrate leaders in Kyiv who consider taking the peninsula back one of their signature goals,” Politico’s Alexander Ward, Paul Mcleary and Connor O’Brien report.
Dan Goldman has an impossible job. He can’t wait to start.
“Democrats are counting on Goldman’s experience as a House investigator to counter Republicans’ own inquiries into the Biden administration. He’s been assigned a prized perch on the House Oversight Committee, from which the GOP will launch its highest-profile investigations. ‘With Republicans set to overreach, and overreach in a major way, Dan has all the skills needed to set the record straight,’ says Rep. Adam Schiff (D-Calif.), who hired Goldman as a House Intelligence staffer in 2019,” Rolling Stone’s Kara Voght reports.
How Dobbs made the Wisconsin Supreme Court race one of the biggest elections of 2023
“A pivotal race to decide the balance of Wisconsin’s Supreme Court will determine the fate of abortion rights in the state — and could come down to two women judges with markedly different judicial philosophies and approaches,” the 19th’s Grace Panetta reports.
Biden approval steady after document discovery: AP-NORC Poll
“More U.S. adults disapprove than approve of the way President Joe Biden has handled the discovery of classified documents at his home and former office, a new poll shows, but that seems to have had little impact on his overall approval rating,” the AP’s Colleen Long reports.
Biden’s departing top aide Klain forecasts president to run again in 2024
“Ron Klain, President Joe Biden’s chief of staff, predicted on Wednesday that Biden would run for re-election in 2024, in remarks as Klain prepared to step down from his role as a top White House aide,” Reuters’s Trevor Hunnicutt and Steve Holland report.
- “As I did in 1988, 2008 and 2020, I look forward to being on your side when you run for president in 2024,” Klain said.
The unemployment rate, visualized
“The unemployment rate inched down to 3.5 percent, according to the latest data from the Bureau of Labor Statistics, hovering near longtime lows as workers have been able to rebound quickly from layoffs,” Lauren Kaori Gurley and Abha Bhattarai report.
The gas industry is under fire. It’s hiring Democratic politicians to help.
“The group, dubbed Natural Allies for a Clean Energy Future, comes as Democratic leaders across the country restrict gas use to fight climate change. The bans threaten customer losses for gas utilities, which dominate the liberal strongholds in cities and on coasts. To resist these efforts, the nonprofit group has enlisted prominent Democratic politicians and pollsters to help enhance gas’s reputation among liberal voters,” Maxine Joselow reports.
The cold calculus behind the shrinking GOP presidential field
“Trump has already declared for a third consecutive run and his imprint was all over the meeting and remains all over the party. Until he declared his candidacy, the RNC was still covering some of his legal bills. And the race for party chair was mostly notable for the fact that neither major candidate was willing to acknowledge the culprit for a disappointing midterm, largely because the committee members would rather focus on nefarious claims about Democratic ballot harvesting than the role of Trump, the man Democrats have organized, mobilized and fundraised off of for six consecutive elections,” Politico’s Jonathan Martin writes.
“So, yes, a number of would-be Republican candidates this time see the party still in the former president’s grip, cast an eye at his preemptive attacks on Florida Gov. Ron DeSantis and say: who needs it, I’ll check back in 2028 when, one way or another, Trump is out of the picture.”
At noon, Biden will have lunch with King Abdullah II of Jordan and Prince Hussein.
Biden and Vice President Harris will speak at 2:15 p.m. about the 30th anniversary of the Family and Medical Leave Act.
At 4:30 p.m., Biden and Harris will meet with members of the Congressional Black Caucus.
Punxsutawney Phil is wrong: Spring is arriving early in some places
“On Thursday, a plump Punxsutawney Phil made his annual Groundhog Day appearance in front of hundreds of adoring fans to furrcast six more weeks of winter. It’s not exactly a bold prediction for the oversized squirrel: He has predicted a longer winter 78 percent of the time in his career. But you don’t need Phil, arguably the most famous ‘weather-forecasting’ groundhog, to predict when the next season will arrive this year. (Also, he’s only right about 40 percent of the time.)” Kasha Patel and Scott Dance report.
Thanks for reading. See you tomorrow.
