KUALA LUMPUR (Nov 10): The European Union (EU) is preparing for a new trade war with the US after Washington approved the Inflation Reduction Act aimed at helping the national production.

Quoting Spanish newspaper Diario on Wednesday (Nov 9), Russian government-controlled TASS news agency said the European Commission believes that the plans of the US President Joe Biden to promote electric vehicles discriminate against foreign manufacturers.

Under the Act, the American authorities are to allocate about US$400 billion on climate and energy policies.

The law in particular promotes the transition to green energy, thereby affecting the European automotive sector, which is very important in countries such as Germany and France, the Spanish newspaper wrote.

The report said that in particular, Brussels was alarmed by nine provisions on tax credits.

It said last week, representatives of the EU and the US had a meeting, which ended inconclusively.

European negotiators believe that the law promoted by Washington is unacceptable, it reported.