The letter to US trade representative Katherine Tai opposed the £370 billion climate subsidy package

London (AFP) - Britain outlined in a letter to Washington its opposition to US green subsidies, claiming they would “harm multiple economies” and “undermine UK-US trade and investment flows”, UK media reported Friday.

The Financial Times (FT) and The Times newspapers cited the letter by UK Trade Secretary Kemi Badenoch to US counterpart Katherine Tai that hit out at the climate subsidy package worth around $370 billion.

Washington’s landmark Inflation Reduction Act (IRA) also contains tax cuts for US-made electric cars and batteries, to accelerate the transition to a low-carbon economy.

It claims the subsidies are needed in the race to battle climate change.

But Badenoch said the plan would “harm multiple economies across the world and impact global supply chains in batteries, electric vehicles and wider renewables”, according to the FT.

The subsidies, “also undermine our shared goals to promote free and fair trade internationally”, The Times quoted Badenoch as saying.

“The UK expects to be and should, as the closest of US allies, be part of any flexibilities in the implementation of the IRA,” she reportedly added.

Contacted by AFP, Britain’s trade department would not comment on Friday’s reports.

Britain had already joined the European Union and countries outside the bloc in opposing the IRA.

The EU sees the domestic production requirement as a threat to European jobs, especially in the energy and auto sectors.

But European nations have been divided on how to respond to the IRA.

French President Emmanuel Macron has urged Europe to adopt its own lavish subsidies while German Chancellor Olaf Scholz has favoured dialogue with Washington.

The IRA has exemptions for products from its trade bloc partners Canada and Mexico, and on Monday Paris and Berlin called for such exemptions to be expanded to EU nations.