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The EU has accused the US of profiteering from the Ukraine war by selling guns and gas at ramped up prices.
Several high-ranking officials within the Bloc accused Joe Biden of capitalizing on the brutal Russian invasion by marking up the cost to import the vital products.
One senior official told Politico they believe America was standing to gain the most from the continuation of the fighting, nine months after soldiers first invaded.
‘The fact is, if you look at it soberly, the country that is most profiting from this war is the U.S. because they are selling more gas and at higher prices, and because they are selling more weapons,’ the official said.
In recent months, Europeans have weaned off Russian energy and gas with the countries forced to look to the US for their oil.
EU countries however pay roughly four-times as much for gas as it costs in America, with cheaper energy becoming hugely competitive in the states.
Businesses are looking to pump cash into the US fuel market with new investments – as some even relocate their firms to the other side of the Atlantic.
It has sent some world leaders in Europe into a frenzy, with French President Emmanuel Macron recently saying it was not friendly of the US to treat allies as it is.
Meanwhile European countries are suffering an arms shortage due to huge shipments that have been sent to Ukraine – with them racing to replenish supplies over the winter.
Yet the Americans continue to send more, with the cost of supplying Ukraine to the US now at over $19billion as another $400million was added earlier this week.
It comes at an already tumultuous moment between the Americans and several nations as Europe grapples with the fallout from Biden’s green subsidies.
‘The Inflation Reduction Act has changed everything,’ one EU official said. ‘Is Washington still our ally or not?’
Tensions came to a boil on Friday as EU trade ministers met and branded the act ‘discriminatory’, ahead of it coming into force in just over a month.
High gas prices and the Inflation Reduction Act’s green subsidies are leaving many Europeans to wonder whether or not the U.S. is still an ally
Europeans have become reliant on U.S. for gas as they leaned away from relying on Russian energy after the start of the Ukraine war, which is still being fought today
As of June 2022, nearly two thirds of gas from the U.S. was going to Europe
The nearly $400 billion subsidy ‘scheme’ introduced in the Inflation Reduction Act incentivizes Americans into buying products that are both U.S. made and energy efficient.
The IRA provides tax credits for businesses and individuals who purchase ‘green’ products, including wind turbines and elective vehicles.
The credits are mostly available, however, for products made in the United States.
The IRA reportedly sent Brussels into ‘full-blown panic mode,’ with country officials concerned over the subsidies taking away from EU products and threatening European businesses.
The country recently set up a task force to look into the impact of the IRA on European nations in the coming months and years.
European trade ministers also gathered in Brussels Friday to discuss the IRA, but no concrete solution was found.
Jozef Sikela, the minister for the Czech Republic, recently said he hopes to have a solution before the EU trade ministers meet in early December.
‘What is important for us is that the US is aware of our concerns and the task force has to work out a solution which will be acceptable for both parties,’ Sikela recently told the Financial Times.
The price of gas coming from the U.S. is nearly four times what Americans are paying
U.S. officials have repeatedly shrugged off the concerns from the European leaders.
At the G20 summit in Bali, EU officials reportedly asked Biden about the high gas prices, to which the American President ‘seemed unaware of the issue,’ according to the official who spoke with Politico.
‘The rise in gas prices in Europe is caused by Putin’s invasion of Ukraine and Putin’s energy war against Europe, period,’ a spokesperson for Biden’s National Security Council told the outlet.
The spokesperson also said that the high gas prices impacting the wallets of Europeans is not to be blamed on the U.S. government, but on ‘private market decisions.’
‘U.S. companies have been transparent and reliable suppliers of natural gas to Europe,’ the official said.
Exporting capacity of gasoline has also been capped thanks to a June accident that shut down a facility involved in the trade.
An official who works for Biden’s National Security Council blames liquefied natural gas buyers in Europe for marking up the price of gas
The NSC official also claimed its liquefied natural gas exporters within the EU that are to blame for the high gas prices for Europeans.
‘The increase in global LNG supplies, led by the United States, helped European allies and partners get storage levels to an encouraging place ahead of this winter, and we will continue to work with the EU, its members, and other European countries to ensure sufficient supplies will be available for winter and beyond,’ the NSC spokesperson said.
It’s a line that some European officials say they are not buying, though.
‘The United States sells us its gas with a multiplier effect of four when it crosses the Atlantic,’ European Commissioner for the Internal Market Thierry Breton recently said.
The nations are also concerned that the U.S. is using its quick and cheap energy practices to seduce businesses into moving from Europe into America.
Solvay, a major chemical multinational corporation, said this week it would move to the U.S. for new investments, an announcement that shocked many.
French President Emmanuel Macron recently said that it’s not friendly of the U.S. to treat allies as it currently is
The Russian war with Ukraine has also disrupted many industries across Europe
A Bloomberg article published in June said that for the first time ever, the U.S. was sending the majority of its gas to European nations.
Nearly three-quarters of liquefied gas from the U.S. was sent to Europe in the first four months of the year, energy officials said at the time. They also said that shipments to the continent had tripled from the same time last year.
The Biden Administration vowed earlier this year to send over more gas as the European nations looked to lean away from the reliance on Russian oil.
That vow, however, came with Americans suppliers who had ‘contract flexibility’ and were able to deliver more fuel to Europe which then was marked up by European businesses, according to the NSC official.
Some EU officials have claimed that the US has the most to gain from the continuation of the war between Russia and Ukraine
European nations, now dependent upon the U.S. and its gas supply, say they are fretting over the impacts of the $369 billion green subsidies and what it will look like for them after already being squeezed on gas prices.
‘The Inflation Reduction Act is very worrying,’ Dutch Trade Minister Liesje Schreinemacher said. ‘The potential impact on the European economy is very big.’
‘The Europeans are discernibly frustrated about the lack of prior information and consultation,’ said David Kleimann with the Bruegel think tank in Brussels.
One transatlantic trade expert also claimed that the policies outright ‘discriminate’ against friends and allies across the pond.
‘The U.S. is following a domestic agenda, which is regrettably protectionist and discriminates against U.S. allies,’ said Tonino Picula, who serves as a member of the European Parliament for Croatia.
In spite of their frustrations with each other, the nations all agreed that Russian President was hoping to sew discord between Europe and its allies, including the U.S.
The nations have called upon the U.S. to consider its allies before letting the policy continue and potentially damage their own industries and economies.
‘Americans — our friends — take decisions which have an economic impact on us,’ said EU’s chief diplomat Josep Borrell.
Borrell, a member of the Spanish Socialist Workers Party, has in the past caught the attention of major media outlets around the world over some of his ‘colorful’ statements and controversial actions.
Just last month, the diplomat came under fire for calling the world ‘a jungle’ and Europe a ‘garden’ that needed to be protected. Many took the man’s comments to be both racist and xenophobic.
In 2018, Borrell was fined 30,000 Euros for insider trading and in 2020, he received harsh criticism after he snapped at whistleblowers who leaked a report about COVID-19 misinformation from the EU.
The diplomat also once said that China is a responsible and reliable partner, unlike the U.S.
While many others have not echoed his exact sentiments, his claims have now been heightened by the ongoing gas dilemma between the U.S. and Europe.
‘Americans — our friends — take decisions which have an economic impact on us,’ said diplomat Josep Borrell
‘America needs to realize that public opinion is shifting in many EU countries,’ the one EU officials said regarding the trade relationship with the U.S., as well as the continued war between Ukraine and Russia.
‘We are really at a historic juncture,’ they continued.
President Biden, through an NSC spokesperson, refuted the claims and pleas from the ally nations in a statement, saying: ‘While we understand that some trading partners have concerns with how the [electric vehicle] tax credit provisions in the IRA will operate in practice with respect to their producers, we are committed to continuing to work with them to better understand and do what we can to address their concerns.’
‘This is not a zero-sum game. The IRA will grow the pie for clean energy investments, not split it,’ the spokesperson said.
The U.S. is hoping that the IRA will help reduce the country’s carbon footprint
As the U.S. attempts to move away from traditional fuels and gases, Europeans have become dependent on the export from the Americans
According to Politico, many across the Atlantic are also growing frustrated over the U.S. and its ability to provide weapons and military aid to Ukraine, totaling more than $15 billion alone. That number is nearly double the €8 billion in aid the EU has sent.
The war has depleted some supplies and it could take years to restock.
This worries the other countries who are concerned the U.S. could seize the opportunity to sell more weapons.
The Pentagon has already announced they are working to develop a plan to speed up sales for military equipment and weapons.
The war between Ukraine and Russia began after Russia invaded the country in February
The battle continues to this day, with the U.S. contributing more than $15 billion in military aid and weapons
The EU, by comparison, has given just €8 billion, combined
An EU official said that the U.S. is being greedy by making money on both weapons and gas and that tensions may simmer if gas prices were negotiated down.
‘It’s not good, in terms of optics, to give the impression that your best ally is actually making huge profits out of your troubles,’ the EU official said.
The back and forth over gas prices, the green subsidy, and the war itself is exactly what Russian President Vladmir Putin wants, the nations all agreed, however.
In spite of that agreement, many of the European nations are still facing high inflation rates, recession, and possible blackouts heading into winter.
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