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Don’t Fret About Green Subsidies

Governments should stop decrying each others’ green industrial policies as norm violations or dangerous transgressions of international rules. The moral, environmental, and economic arguments all favor those who subsidize their green industries, not those who want to tax others’ production.

CAMBRIDGE – A trade war over clean technologies is brewing. The United States and the European Union, worried that Chinese subsidies threaten their green industries, have warned that they will respond with import restrictions. China, in turn, has lodged a complaint at the World Trade Organization about discriminatory provisions against its products under US President Joe Biden’s landmark climate legislation, the Inflation Reduction Act (IRA).