In the fall of 2022, two senior Biden administration officials met in New York with a key European diplomat. Over an outdoor dinner, they strategized on how best to limit Russia’s oil revenues in retaliation for its invasion of Ukraine.
Towards the end of what had been a collegial meal, the European official, Bjoern Seibert, dropped a bombshell on his hosts, Mike Pyle of the National Security Council and Wally Adeyemo, the deputy secretary of the Treasury. Europe, Seibert said, has big problems with President Biden’s sweeping new climate law.
Mr Seibert, chief of staff to the president of the European Commission, said senior officials from European Union member states feared Mr Biden was trying to drive a competitive wedge between their countries and the United States, by granting subsidies for products made in China. -American clean energy technology. They feared that the president was trying to secure the future of American manufacturing at the expense of some of the United States’ closest allies.
The exchange sparked months of behind-the-scenes talks, a major regulatory concession from the Treasury Department and high-level negotiations between Mr. Biden and his fellow world leaders, all aimed at assuaging those concerns.
Officials at the dinner worked to develop a harmonized industrial strategy among rich countries. It aims to boost technologies that reduce greenhouse gas emissions, limit global warming and counter China’s manufacturing power in global markets.
The effort appears to have partly repaired a transatlantic divide linked to what Europe sees as America’s increasingly protectionist economic policies.
The administration’s top man was Mr. Pyle, a low-key National Security Council aide who will leave the administration at the end of this month after more than three years in the White House. Mr. Pyle played a considerable role in establishing and promoting Mr. Biden’s vision of global economic cooperation and confrontation to often-skeptical allies.
Mr. Pyle’s mandate as deputy national security adviser for economic affairs was to piece together some of the operational details of a novel effort to limit Russia’s revenue from global oil sales. It is a series of administrative attempts to forge a global alliance to supplant China.
And over the course of nine frantic months, Mr. Pyle led an effort to quell the fury of American allies over the Inflation Reduction Act.
“There was an initial wave of concern from partners around the world who really didn’t understand this legislation and the president’s agenda,” said Lael Brainard, who heads Mr. Biden’s National Economic Council. in an interview. Mr. Pyle, she said, “went into action, jumped on planes and did an awful lot of shuttle diplomacy.”
Deputy National Security Advisor for Economic Affairs leads negotiations on declarations at international summits, often working months in advance to iron out disagreements with allies.
That’s why Mr. Pyle was the target of Mr. Seibert’s warning about the Inflation Reduction Act. European leaders had initially welcomed the law, the largest-ever investment by the United States in fighting climate change, through tax credits and other subsidies intended to accelerate the deployment of clean energy. But European officials quickly came to view some of these subsidies, such as for electric vehicles, as discriminatory: they were reserved for products made and purchased in America, or from close trading partners like Canada and Mexico.
Mr Pyle acknowledged the concerns but quickly backed down. He told Mr. Seibert that Mr. Biden hoped to lead a coordinated effort to subsidize the manufacturing of low-emissions technologies. He suggested the administration could immediately begin working to ensure businesses in allies like the European Union, Japan and South Korea can benefit from U.S. climate law.
Mr. Pyle explained the law to allies and began “thinking about how we can design a way to work together,” Mr. Adeyemo recalled.
In meetings over the coming months, Mr. Pyle and his colleagues outlined measures they hoped would ease Europe’s concerns over climate legislation. They considered a Treasury Department regulation — before it was publicly announced — that would allow electric vehicles leased, including from European and Asian automakers, to qualify for a full consumer tax credit under the law.
They also outlined the outlines of a new type of limited trade deal that the European Union, the United Kingdom and Japan could sign with the United States to allow their companies to benefit from other tax breaks from of the Inflation Reduction Act. develop the template for these limited trade agreements.
“He knows his job very well,” Mr. Seibert said. “He knows what is politically possible in the United States.”
The meeting paved the way for a joint statement on energy and climate cooperation from Mr. Biden and Ursula von der Leyen, President of the European Commission and a statement from the Group of 7 leaders that they were taking steps to “lead the transition to the clean energy economies of the future through Cooperation “.
Mr Pyle said he was pleased with the progress, but tensions around the law were still “a work in progress”.
Mr. Biden, he said, “is proposing a new model for meeting today’s challenges, and one that tests the old rules with new kinds of solutions.” It’s hard.”
