Biden, EU chief signal thaw on trade tensions

President Joe Biden and top EU official Ursula von der Leyen announced progress in defusing a transatlantic trade dispute Friday and renewed their commitment to back Ukraine against Russia.

In a limited, but concrete step, the two leaders announced after Oval Office talks that negotiations will begin on giving EU producers of critical minerals access to the US market under Biden's signature programme to encourage climate friendly industries.

They also pledged to coordinate generally as both US and EU economies pivot to the booming electric vehicle and other green sectors.

Von der Leyen, president of the European Union Commission, has worked closely with Biden in forging an unprecedented response to the Russian invasion of Ukraine over the last year.

Biden told von der Leyen that the alliance to support Ukraine marked "a new era."

And in their joint statement later, they said that Russian President Vladimir Putin "thought that he would divide us, and yet we are more united than ever. We stand together in our unwavering support for Ukraine for as long as it takes."

Electric vehicle tensions 

However, tensions are swirling in Europe over the Biden administration's landmark Inflation Reduction Act (IRA), a government spending spree championing US manufacturing in climate-friendly technologies.

Amid EU alarm that the subsidies' "made in America" requirement will hurt European-based energy and auto sectors, the EU is working on its own sets of incentives, such as the Green Deal Industrial Plan, to promote the emerging sector.

The joint statement indicated that Biden and von der Leyen made progress with a deal to start talks on an exemption for European producers seeking to export critical minerals for electric vehicle batteries.

"Today we agreed that we will work on critical raw materials that have been sourced or processed in the European Union and to give them access to the American market as if they were sourced in the American market. We will work on an agreement," von der Leyen told reporters after meeting Biden.

Their statement said more broadly that "both sides will take steps to avoid any disruptions in transatlantic trade and investment flows that could arise from their respective incentives. We are working against zero-sum competition so that our incentives maximize clean energy deployment and jobs."

China differences 

Another difficult area is how to respond to China's increasingly muscular foreign and trade policies.

The White House said that "challenges posed by the People's Republic of China" featured prominently in the talks.

Washington has been urging European capitals to take a firmer stand against Beijing – not just diplomatically, but also economically. However, the EU is keen to avoid rupture with China, leaving the transatlantic allies somewhat divided on how to move forward.

Elvire Fabry, an analyst at the Institut Jacques Delors, a Paris-based think tank, told AFP that the White House session was a chance for von der Leyen to show EU desire to work with Washington, "but not in the position of follower, especially when it comes to China."

"The European position is based on wanting to maintain its own line concerning Beijing."

However, the US official stressed the cohesion between Brussels and Washington on the overall view of the China challenge.

"There is unprecedented alignment between the US and Europe," he said, predicting the two leaders will express "a focus on the need to strengthen our economic security, to respond to concrete threats to economic security" from China.

In their joint statement, Biden and von der Leyen made only fleeting mention of China.