US Policy Mismatch, How the IRA Contradicts Biden’s China Strategy: The Case of the EU’s Strategic Autonomy
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2023-07-03
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en
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This thesis addresses the question ‘to what extent does the IRA challenge the EU’s strategic autonomy and, therefore, contradict the Biden Administration’s China strategy objective of deterring China’s rise through close US-EU cooperation?’ This thesis complements the existing literature by outlining how a US policy measure, the IRA, impacts the EU’s ability to pursue strategic autonomy and protect shared transatlantic values challenged by China’s rise. Accordingly, this thesis provides a deeper understanding of how the EU and the US hold divergent approaches to achieving similar objectives and pursuing shared values. This research takes a three-step approach. First, it examines the extent to which the US and EU values inform these divergent approaches on how to achieve strategic autonomy. Second, it is outlined how the IRA challenges the EU’s green energy transition ambitions, and third, this research illustrates the EU’s dependency on China related to the bloc’s energy transition ambitions and examines to what extent EU fears of a green energy manufacturing exodus to the US as a consequence of IRA subsidies is justified. Integrating the findings of these three steps, this thesis concludes that the IRA challenges the EU’s green manufacturing capacity and, therefore, hampers the bloc’s ability to achieve its green energy transition without reducing its dependencies on China. Therefore, the IRA contradicts the Biden Administration’s China strategy objective of containing China’s rise through close cooperation with partners to isolate China. As long as EU companies are not eligible for IRA subsidies without moving activities to the US, the EU’s ability to reduce its dependency on Chinese-owned critical raw materials for the EU’s green energy transition is challenged.
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