In the fall of 2022, two senior Biden administration officials met with a key European diplomat in New York. Over dinner outdoors, they considered how best to curb Russia's oil revenues in retaliation for its invasion of Ukraine.
Near the end of a friendly meal, European official Bjorn Seibert dropped a bombshell about his hosts, Mike Pyle of the National Security Council and Wally Adeyemo, the deputy finance minister. Europe, Mr. Seibert said, has big problems with President Biden's sweeping new climate law.
Mr. Seibert, the head of the European Commission's president's cabinet, said top officials among European Union member states feared that Mr. Biden was trying to drive a competitive wedge between their countries and the United States by wasting subsidies on manufactured-America clean energy technology . They feared that the president wanted to secure the future of U.S. manufacturing at the expense of some of America's closest allies.
The exchange set off months of behind-the-scenes talks, a major regulatory concession from the Treasury Department and high-level negotiations between Mr. Biden and other world leaders, all intended to allay those concerns.
Officials at that dinner worked to craft a harmonized industrial strategy among wealthy nations. The aim is to promote technologies that reduce greenhouse gas emissions, limit global warming and counteract China's manufacturing power on global markets.
These efforts appear to have partially resolved a transatlantic rift over America's increasingly protectionist economic policies in Europe.
The administration's enabler was Mr. Pyle, an under-the-radar National Security Council adviser who is leaving the administration at the end of this month after more than three years in the White House. Mr. Pyle played an outsized role in implementing and selling Mr. Biden's vision of global economic cooperation and confrontation to often skeptical allies.
Mr. Pyle's tenure as deputy national security adviser for international economic affairs included putting together some of the operational details of an untested attempt to limit Russia's revenue from global oil sales. It included a series of government attempts to forge a global alliance to outdo China.
And over the course of a hectic nine months, Mr. Pyle led the effort to quell anger among American allies over the Inflation Reduction Act.
“Initially there was a wave of concern from partners around the world who really didn't understand this legislation and the president's agenda,” Lael Brainard, who leads Mr. Biden's National Economic Council, said in an interview. She said Mr. Pyle “jumped into action, jumped on planes and did a lot of shuttle diplomacy.”
The deputy national security adviser for economic affairs leads negotiations on statements at international summits and often works months in advance to resolve disagreements with allies.
That's why Mr. Pyle was the recipient of Mr. Seibert's warning about the Inflation Reduction Act. European leaders had initially welcomed the law, the United States' largest-ever investment in the fight against climate change through tax credits and other subsidies intended to accelerate the deployment of clean energy. But some of these subsidies, such as for electric vehicles, were quickly perceived by European officials as discriminatory – they were reserved for products manufactured and sourced in America or from close trading partners such as Canada and Mexico.
Mr Pyle acknowledged the concerns but quickly defended himself. He told Mr. Seibert that Mr. Biden hoped to lead a coordinated effort to subsidize the manufacturing of low-emission technology. He suggested the administration could begin work immediately to ensure that companies in allies like the European Union, Japan and South Korea could benefit from America's climate law.
Mr. Pyle explained the law to allies and began “thinking about how we can find a way to work together,” Mr. Adeyemo recalls.
In meetings over the following months, Mr. Pyle and his colleagues laid out steps they hoped would allay Europe's concerns about climate law. They previewed a Treasury Department regulation — before it was announced publicly — that would allow leased electric vehicles, including from European and Asian automakers, to essentially receive a full consumer tax credit under the law.
They also outlined the outlines of a new limited trade agreement that the European Union, the United Kingdom and Japan could sign with the United States to allow their companies to participate in other Inflation Reduction Act tax breaks. Mr Pyle would help create the template for these limited trading arrangements.
“He knows his stuff very well,” said Mr. Seibert. “He knows what is politically possible in the United States.”
The meeting paved the way for a joint statement by Mr. Biden and Ursula von der Leyen, the president of the European Commission, on energy and climate cooperation, as well as a statement by Group 7 leaders that they would take steps to ” to drive the transition.” clean energy economies of the future through collaboration.”
Mr Pyle said progress was encouraging but tensions over the law were still a “work in progress”.
Mr. Biden, he said, is “pushing a new model for today's challenges and one that tests old rules with new kinds of solutions. “That's difficult.”
Comments are closed.