Biden and Macron face dispute over American subsidies during state visit

Photo: PAP/EPA/Ting Shen/POOL

U.S. President Joe Biden and French President Emmanuel Macron celebrate more than 200 years of U.S.-French relations on Thursday, as a dispute over new American subsidies simmers in the background.

Biden is hosting Macron at the first state visit since the U.S. leader took office in early 2021. A colourful arrival ceremony is planned and 200 lobsters are flown in from Maine for a glittering state dinner by Biden and his wife Jill.

The two leaders are to hold talks then conduct a joint news conference at 11:45 a.m. EST (1645 GMT). On Tuesday, Macron arrived with his wife, Brigitte, in Washington for his second state visit since taking office.

Although the two have met at many international gatherings, this will be the most time they have spent together. Macron is expected to raise French and European concerns about subsidies in Biden's Inflation Reduction Act (IRA), a USD 430 billion bill that offers massive subsidies for U.S. products and is aimed at addressing the climate issues.

According to European leaders, Biden's legislative package in August is unfair to non-American companies, and it would be a serious blow to their economies after Russia's invasion of Ukraine in February.

In a meeting on Wednesday with U.S. lawmakers at the Library of Congress, Macron reportedly said that the act was “super aggressive” toward European companies.

In Washington, Macron told the French community that Europeans have paid a much higher price for the war in Ukraine than Americans, and that subsidies risk siphoning new investment from Europe. It could lead to the fragmentation of the West.

It was not clear whether Biden was willing to make concessions. White House spokesperson Karine Jean-Pierre said the legislation “presents significant opportunities for European firms as well as benefits to EU energy security,” when asked about European concerns.

Despite some differences with the Biden administration, Macron is the first foreign leader to receive a state dinner at the Biden White House. Macron's visit came as NATO ministers met in Bucharest and pledged more aid to Ukraine to help against Russia's attacks on energy infrastructure as winter bites.

NATO was also discussing how to address challenges posed by China's military buildup and its cooperation with Russia, while Macron has said in the past that China should not be a focus for NATO.