Explainer-in-brief: Britain is the piggy in the middle of EU-US trade tensions

Joe Biden and Emmanuel Macron will have to confront the difficult issue of green subsidies this week. (Photo by Phil Noble – WPA Pool/Getty Images)

Emmanuel Macron is in the US this week to meet President Joe Biden and try to avoid a potential trade war. The subject is green subsidies, part of the colossal Inflation Reduction Act passed by Biden over summer.

Biden wants to inject billions of dollars into US-made green technologies, and the EU is worried about the impact, particularly on the electric cars industry. The bloc is considering whether to fight back with its own subsidies, which would effectively start a trade war.

The UK is, depending on how you see it, safely out of the fight or squeezed right in the middle of it. It is not entangled in the bloc’s fights anymore (perhaps finally a “Brexit dividend”?), but a trade war between two big partners could mean uncertainty on our shores.

Macron will be the European envoy tasked with avoiding a subsidy race. But if Biden doesn’t concede, the future will look uncertain – for the UK too.

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