European producers, faced with a surge in energy prices, are shifting operations to the United States, hoping to take advantage of both greater stability in the US energy market and government incentives, The Wall Street Journal writes.
Experts warn of the possibility of a new wave of deindustrialization in Europe amid wild energy price fluctuations and persistent problems in supply chains. The operating environment in the US looks much more favorable, especially for chemical manufacturers and companies in other energy-intensive industries. In August, US President Joe Biden signed the Inflation Reduction Act (IRA), which provides, in particular, tax incentives for industrial companies and representatives of the green energy sector.
Earlier this month, the WSJ reported, citing sources, that American electric car maker Tesla Inc. paused a plan to manufacture batteries in Germany in connection with the possibility of obtaining tax benefits in the United States. Sources told the paper that Tesla is considering shipping battery manufacturing equipment to the States for its Berlin facility.
European companies that have announced expansions in the US this year include automaker Volkswagen AG, as well as, for example, the Dutch chemical company OCI NV, which owns an ammonia plant in Texas.
European steelmaker ArcelorMittal SA earlier this month announced it was cutting production at two plants in Germany. At the same time, the results of her Texas enterprise turned out to be better than expected, which the head of the company, Aditya Mittal, explained by the low cost of energy in the region.
Experts note that the US economy has weathered the pandemic fairly well and is more attractive for business than Europe and China, despite record inflation, continued problems in supply chains and the risks of a recession as a result of tightening monetary policy by the Federal Reserve System (Fed). China is still under lockdown to contain the spread of COVID-19, and Europe is destabilized by the energy crisis due to the conflict in Ukraine.
It will be difficult for European manufacturers to remain competitive without lower energy prices or government subsidies, said Svein Tore Holseter, chief executive officer of Norwegian chemical company Yara International ASA.
“Some industries will have to relocate production on a permanent basis as a result,” he said.
Prime Minister of Ukraine Denys Shmyhal says that the state budget has received a $1.5 billion grant from the United States from the World Bank Trust Fund.
“The state budget received a grant in the amount of $1.5 billion. This is the last tranche of $4.5 billion from the United States from the World Bank Trust Fund,” Shmygal wrote on Twitter.
According to him, the funds will be used to reimburse budgetary expenses for pension payments and social assistance programs.
The prime minister thanked US President Joseph Biden for supporting Ukraine.
The United States will provide Ukraine with $89 million to deploy 100 demining teams, US Ambassador to Ukraine Bridget Brink said.
“Mines, unexploded ordnance, other explosive objects block agricultural land, delay recovery, prevent people from returning home, kill, maim innocent Ukrainians. Therefore, we are providing $ 89 million for Ukraine to deploy 100 demining teams and make the country safer,” – wrote the ambassador on Twitter.
Over 23,000 Ukrainians have received permission to enter the United States as part of the new program of the administration of President Joseph Biden for Ukrainian refugees, CNN reports.
“According to the US Department of Homeland Security, more than 23,000 Ukrainians have received permission to enter the United States under the new program,” the statement said.
The TV channel notes that 6,000 of them have already arrived in the United States.
The Biden administration had previously pledged to accept up to 100,000 Ukrainians.
Earlier in April, US President Joseph Biden announced the “Uniting for Ukraine” program for accepting refugees from Ukraine, which will speed up their relocation to American territory. The program provides an opportunity for accelerated migration from Europe to the US to Ukrainians who have an American “sponsor”, such as a family or an NGO, ready to deal with them.
Chargé d’Affaires of the United States in Ukraine Christina Quinn said that she had returned to Kyiv.
“Just arrived in Kyiv! Glad to be back here on Victory in Europe Day. Glory to Ukraine! We are together with Ukraine,” the embassy tweeted on Sunday evening.
The United States will provide the government of Ukraine with another $500 million in direct economic assistance, U.S. President Joe Biden said on Thursday.
“Today, the United States is announcing that we intend to provide an additional $500 million in direct economic assistance to the Ukrainian government,” Biden said. According to him, the government of Ukraine will be able to use this money to stabilize the economy, support the population and pay salaries to employees.
He said that, thus, the total U.S. economic support to Ukraine over the past two months amounted to $1 billion.
