How should Europe react to the Inflation Reduction Act?

The Inflation Reduction Act (IRA) of 2022 is a milestone in US
climate policy. Unfortunately, it also contains protectionist
elements, such as linking green subsidies to local content
requirements (LCRs). This is prohibited under WTO rules.
Legislating such LCRs is a first for the United States, and a
blow to the multilateral trading system.

In this episode of the Sound of Economics, Bruegel director
Jeromin Zettelmeyer invites Kimberly Clausing and Sébastien Jean
to discuss the policies laid out in the IRA and the impact it
will have on the United States and other countries. They also
discuss the global responses to the act and how EU policy makers
in particular should react.

Our new policy brief explains what is in the IRA, the impact on
the EU and other economies, and how the EU should react.