US Treasury Secretary Janet Yellen said again on Thursday that the Biden administration does not want to punish its trading partners, especially in Europe, over its climate plan, despite concrete difficulties in developing the rules, AFP reports.

“The goal of Congress was to make sure we have secure supply chains and try to engage our allies. So we’ll see what can be done,” Treasury Secretary Joe Biden assured during a trip to Fort Worth, Texas.

She cited US subsidies that are only given to electric cars made in the United States, which is “also a cause for concern”.

“We at the Treasury are responsible for writing the rules for various tax benefits. And we’re listening to a wide range of stakeholders to make sure we succeed,” Yellen said.

The European Union has been concerned for months about the implications of the IRA, US President Joe Biden’s US$420 billion climate plan passed last summer and which was the focus of French President Emmanuel Macron’s state visit to Washington last week.

The topic was also discussed by the United States and the European Union on Monday near Washington at the Trade and Technology Council (TTC).

Ms. Yellen also insisted that the US economy could avoid a recession in 2023 despite still very high inflation (7.7% a year in October).

“I think we are on the right track to slow inflation and that a recession can be avoided,” she said.

The persistence of such high inflation prompts the central bank (the Fed) to tighten monetary conditions before slowing economic activity and thus inflation, but with the risk of triggering a recession.