Biden to host EU chief as Europe hopes to avoid subsidy race with the U.S.

President Joe Biden volition invited Ursula von der Leyen to the White House this week, with the European Union's apical authoritative anxious to summation concessions amid a tense subsidy spat betwixt the 2 elephantine trading blocs.

Both sides of the Atlantic person been embroiled successful a commercialized quality successful the aftermath of Biden's Inflation Reduction Act, which has allocated much than $300 cardinal successful clime and greenish vigor policies. While EU officials person said they enactment the U.S.'s efforts to person a much sustainable economy, they are disquieted immoderate subsidies and provisions of the instrumentality volition divert concern distant from Europe.

"We privation to execute arsenic overmuch non-discriminatory attraction for EU products and companies arsenic possible, avoiding distortions of the level playing field," a spokesperson for the European Commission, told CNBC via email Friday.

Tesla, Enel, Solvay, EDP and Volkswagen are among the companies that person expressed an involvement successful benefiting from the subsidies stateside and are truthful pressing up with enlargement plans successful the U.S. This could yet mean little innovation successful Europe and less jobs for Europeans too.

"I bash not deliberation [European Commission President Ursula] von der Leyen volition negociate to extract meaningful concessions from the U.S. connected the IRA. Ultimately, the full constituent of the IRA is to fortify U.S. manufacture successful sectors related to the greenish transition," Anna Rosenberg, caput of geopolitics astatine Amundi Asset Management, told CNBC Monday.

"Therefore, the IRA is targeted astatine the EU simply due to the fact that European firms person truthful acold been leaders successful that abstraction and the U.S. wants to pull them. Granting meaningful concessions would decision the intent of the IRA," she added.

Speaking to CNBC's "Squawk Box Europe" Tuesday, Klaus Rosenfeld, CEO of automotive supplier Schaeffler, said "Europe has to beryllium cautious [so] that they don't suffer out."

Von der Leyen arrives successful Washington, D.C., Wednesday and is gathering Biden astatine the White House Friday. In caller weeks, Europe's commercialized and contention chiefs person besides been successful the United States for discussions with lawmakers. In aboriginal February, the French and the German system ministers besides flew to the U.S. superior for discussions.

An EU official, who did not privation to beryllium named owed to the delicate quality of the talks, said that "the main happening is perchance a committedness connected captious earthy materials" successful presumption of what von der Leyen mightiness get this week from Biden.

This would mean that European companies mightiness suffice for IRA enactment if they supply a portion of the earthy materials needed backmost successful the U.S. for manufacturing processes.

"The EU and U.S. are moving unneurotic to guarantee that our respective inducement programmes are just and mutually reinforcing and frankincense thrust the greenish transition," the spokesperson for the committee besides said.