ENERGY, CHINA DRIVE WEDGE BETWEEN ATLANTIC ALLIES: President Joe Biden's trade platform has always included a central plank: cooperation with allies. But lately, relations with America's most important global partner — Europe — appear to be splintering. Tax credit conflict: On Friday, the European Union launched a rhetorical broadside against clean energy tax credits in the Inflation Reduction Act, arguing in comments submitted to the Treasury Department that the policies, which incentivize American manufacturing, contain "clearly discriminatory domestic content requirements, in breach of WTO rules." Waivers sought: The comments request waivers from many measures in the new law, which the bloc argues will threaten investment in the EU and cooperation to address climate change. "If implemented in its current form, the Act risks causing not only economic damage to both the U.S. and its closest trading partners, resulting in inefficiencies and market distortions, but could also trigger a harmful global subsidy race to the bottom on key technologies and inputs for the green transition," the European Commission wrote in comments . Our own Doug Palmer has more for Pros here . China tech disconnect: The comments come after months of bubbling discontent over not just the IRA tax credits, but the administration's escalation of its technology war against China. Reminder: The U.S. issued strict new microchip rules last month preventing American firms from shipping chipmaking equipment to Chinese companies. The aim: to cut off Beijing's development of advanced semiconductors that can be used by the People's Liberation Army. Follow our lead? American officials have been adamant that allies around the world will soon do the same for their own chipmakers — an essential step to ensure Chinese firms cannot obtain chipmaking equipment from non-U.S. firms. Commerce Secretary Gina Raimondo gave the latest assurance on Thursday, telling Jim Cramer on CNBC that the Dutch and Japanese — two nations with advanced chipmakers — will soon "follow our lead." But those calls are ringing hollow across the pond. U.S. and EU officials are unlikely to arrive at a pact to cooperate on tech rules toward China at their next meeting — the Trade and Technology Council next month — according to two EU officials who spoke to POLITICO last week . American officials have already raised the idea of discussing coordination on Chinese chip exports, but the Europeans are split on the issue. Germany, whose export-oriented economy is reliant on China, and Eastern European nations led by Hungary, want to maintain more positive relations with Beijing. Subsidy race feared: Instead of export controls, the discussions around semiconductors at the upcoming Trade and Technology Council meeting are expected to focus solely on how Washington and Brussels can spend the tens of billions of dollars in microchip subsidies that both recently announced to bring high-tech manufacturing closer to home, according to five U.S. and EU officials involved in those discussions, who spoke on the condition of anonymity to discuss internal deliberations. Even if Brussels can't coordinate a united policy among the EU's 27 member nations, the U.S. could strike a deal with the Dutch national government itself. The Netherlands is one of the leading European countries with advanced semiconductor firms, and The Hague could use its national security authority under EU rules that allows countries to move unilaterally on defense-related policies. But Dutch representatives told POLITICO they have yet to receive a direct request for new controls from Washington. "There's a plurality of views in Europe on how to approach China," said Tyson Barker, a former U.S. state department official and now head of the technology and foreign policy program at the German Council on Foreign Relations, a Berlin-based think tank. "Coordinating muscular action against China takes time, and it's just not on the U.S. timetable." U.S.-INDIA TRADE POLICY FORUM DELAYED UNTIL EARLY 2023: The United States and India will hold their annual Trade Policy Forum sometime in early 2023, instead of this week as was reported in the Indian press, a USTR spokesperson told Morning Trade. The delay will give the two sides more time to achieve substantive outcomes, the aide said. U.S. Trade Representative Katherine Tai traveled to New Delhi last year for the first TPF since 2017. Former USTR Robert Lighthizer refused to hold another forum unless it was certain to produce " concrete results ." Over the next three years, both sides tried in vain to negotiate a bilateral trade deal for then-President Donald Trump and Prime Minister Narendra Modi to sign. No agreement was reached and no other Trade Policy Forum was held. Tai and Indian Commerce Minister Piyush Goyal met last year and reached agreements to boost agricultural trade: India promised to remove barriers for American pork, cherries and alfalfa hay, while the U.S. said it would allow imports of Indian mangoes and pomegranates. Tai and Goyal also identified a long list of future work issues , including items such as ethanol, medical devices and the handling of U.S. Social Security payments made by Indian nationals who work in the United States. And they agreed to hold the next TPF before the end of 2022. Good news, bad news: In another sign of improved bilateral cooperation, India decided this year to join the U.S.-led talks on the Indo-Pacific Economic Framework. But it opted out of the trade pillar negotiations led by USTR. Yellen headed to New Delhi: Treasury Secretary Janet Yellen will be in New Delhi Friday for a separate forum, the U.S.-India Economic and Financial Partnership, and then head to Bali, Indonesia, for a G-20 finance ministers meeting, as well as the Nov. 15-16 leaders summit. APEC coming up: Tai is expected to travel to Thailand this month for the trade ministers meeting that precedes the annual APEC leaders summit. KENYAN TRADE CONTINUITY: Kenyan Foreign Minister Alfred Nganga reaffirmed his country's interest in a trade agreement with the United States, despite a change in government due to the election of a new president, William Ruto. "We are willing to work very hard and to trade together as partners and that will grow both our economies," Nganga said Friday in Germany, prior to a meeting with Secretary of State Antony Blinken EX-IM BANK TOUTS U.S-AFRICAN MOU: The president and chair of the U.S. Export-Import Bank signed a $500 million Memorandum of Understanding with the Republic of Côte d'Ivoire on her first trip to Africa last week. Reta Jo Lewis, the first Black woman to lead the bank, also outlined plans to enhance the entity's relationship with the continent at a speech at the Africa Investment Forum, a three-day conference aimed at catalyzing new investment in the region. The White House takes note: The MOU comes about a month ahead of the U.S.-Africa Leaders Summit , when President Joe Biden will host politicians from across the African continent to converse about economic engagement, global food security and progress toward democratic norms.
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