PARIS — As world finance leaders collect this week in Washington for the annual conferences of the International Monetary Fund, Bruno Le Maire, the finance minister of France, made clear that efficient French-American cooperation on an overhaul of the worldwide tax system couldn’t masks stark variations on China and different points.
“The United States wants to confront China. The European Union wants to engage China,” Mr. Le Maire, a detailed ally of President Emmanuel Macron of France, stated in a wide-ranging interview forward of the conferences. This was pure, he added, as a result of the United States is the world’s main energy and doesn’t “want China to become in a few years or in a few decades the first superpower in the world.”
Europe’s strategic precedence, in contrast, is independence, “which means to be able to build more capacities on defense, to defend its own view on the fight against climate change, to defend its own economic interest, to have access to key technologies and not be too dependent on American technologies,” he stated.
His remarks mirrored unresolved tensions that got here to the floor final month in a livid disagreement between France and the United States over President Biden’s determination to supply nuclear-powered submarines to Australia. The deal changed an earlier French contract to promote Australia typical submarines. Mr. Macron was not knowledgeable of Australia’s plans till the final minute.
“Clearly there has been at least an important misunderstanding between France and the United States, and there has also been, I would say, misbehavior from the U.S. administration,” Mr. Le Maire stated.
The key query now for the European Union, he stated, is to change into “independent from the United States, able to defend its own interests, whether economic or strategic interests.” Still, he added, the United States stays “our closest partner” when it comes to values, financial mannequin, respect for the rule of regulation, and embrace of freedom.
But with China, he stated, “We do not share the same values or economic model.”
France and the United States are striving to restore the injury from the submarine deal and the French ambassador, who was recalled to Paris in protest, has returned to Washington. Mr. Macron, who will meet Mr. Biden this month, desires to see a better American dedication to impartial European protection ambitions that he says can be complementary to NATO, in addition to proof of American respect for European strategic ambitions within the Indo-Pacific area.
Asked if variations over China meant inevitable divergence between the United States and Europe, Mr. Le Maire stated, “It could be if we are not cautious.” But each effort needs to be made to keep away from this, which implies “recognizing Europe as one of the three superpowers in the world for the 21st century,” alongside the United States and China.
An space the place Europe and the United States have been working in lock step is on monetary reform. Efforts to press probably the most sweeping overhaul of the worldwide tax system in a century are nearing a breakthrough.
Finance ministers of the Group of 20 largest economies are anticipated to again an accord on the I.M.F. conferences as early as Wednesday, following a landmark deal final week by practically 140 nations to create a 15 p.c world minimal company tax and new guidelines that may pressure company and expertise giants like Amazon and Facebook to pay an applicable share of tax wherever they function.
The pact, meant to crack down on tax havens which have drained nations of much-needed income, follows months of negotiations which have included intense behind-the-scenes lobbying by Mr. Le Maire and the U.S. Treasury secretary, Janet Yellen.
Mr. Le Maire stated that he had labored “very well with Janet Yellen on many key issues,” and was decided to enhance the connection between the 2 nations. “But it is also up to the United States to take some decisions in the right direction to restore confidence between the two continents and between the two countries.”
One of the most important lingering factors of rivalry is over metallic tariffs that former President Donald J. Trump imposed globally in 2018. Officials face troublesome negotiations in coming weeks. Europeans plan to impose retaliatory tariffs on a variety of U.S. merchandise as of Dec. 1, until Mr. Biden pulls again a 25 p.c obligation on European metal and a ten p.c tax on aluminum.
“If we want to improve the bilateral economic relationship between the continents, the first step must be for the United States to lift the sanctions in the steel and aluminum case,” Mr. Le Maire stated. “We are fed up with the trade wars,” he added. “It is clearly not in the interest of the United States and not in the interest of the E.U.”
Improving financial stability within the wake of the pandemic is essential. Mr. Le Maire has overseen a large support program to steer France out of a historic recession that included beneficiant state funding to forestall mass layoffs by subsidizing wages and reduction for companies struggling to pay their payments.
The help is now being wound down because the economic system stabilizes amid widespread vaccinations. The economic system is anticipated to develop 6.25 p.c this 12 months, whereas unemployment, a political lightning rod six months from a presidential election, is projected to fall to 7.6 p.c by year-end, the bottom in over a decade.
The rebound is essential as France gears up for its election in April. Mr. Le Maire stated he’s beginning a political motion to again the re-election of President Macron.
The far proper is presenting a robust problem as Éric Zemmour, a author and TV celeb identified for his anti-immigrant nationalism, positive factors floor in political polls by tapping into insecurity over immigration and fears of rising financial inequality from globalization.
“You have extremist parties rising everywhere in Europe and everywhere in the Western countries because many people are afraid of what is happening due to climate change, due to the technological revolution, due to the important moves of migration,” Mr. Le Maire stated. “The best way to fight against extremist parties is to get results,” he stated.
But within the nation the place the anti-elite Yellow Vest protest motion raged for a lot of months, beginning in 2018, Mr. Le Maire acknowledged that the frustrations that fueled the mass protests may flare once more in France and unfold to different European nations if inequality worsens as governments attempt to deal with local weather change by shifting away from low-cost gasoline to renewable power sources.
With the worth of power wanted to bridge that transition hitting document highs, “climate transition remains a risk for all of us, for all democracies, because it will be very costly — far more costly than expected,” Mr. Le Maire stated.
“I really think that a new Yellow Vest movement remains possible everywhere within Europe,” he added. Securing a world tax deal will likely be essential to assist keep away from that by bringing governments a significant supply of latest income to scale back inequality divides, he stated.