A deal to allow EU carmakers to benefit from US subsidies under the Inflation Reduction Act is under threat 24 hours before it was expected to be agreed at a summit on Friday.
US and EU teams are in intensive talks to rescue the accord over Washington’s demands on environmental and labour conditions. The biggest hurdle is the US’s insistence for countries where European carmakers are sourcing their electric battery materials from to allow inspections of mines and processing centres, according to EU diplomats.
Brussels says it has similar environmental and labour standards through its own regulations and the inspection idea is impractical, said officials.
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