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The likely truce also reflects the desire of both leaders to showcase the strength of the transatlantic alliance in supporting Ukraine against Russia’s invasion.
The US would also like to see the European Union move closer to its more hawkish stance on China, particularly amid concerns that Beijing might do more to support Moscow. Yet the EU, which has tried to maintain a more nuanced approach, doesn’t want to talk about a new cold war.
Here are the main issues to watch:
Clean-Tech Race
After an initial wave of panic over generous subsidies in the US climate law, the EU wants to see how flexible the Biden administration can be in applying it. The Europeans still believe the Inflation Reduction Act contains some discriminatory elements, chiefly relating to electric vehicles, but the bloc isn’t currently considering taking the US to the World Trade Organization, people familiar with the matter said.
Instead, the EU’s executive arm is working to strengthen its own suite of offerings to boost industry in Europe, most immediately by making its funding more flexible and tweaking its state aid regime. In addition, Europe has been discussing some concessions that would allow its firms to benefit from the US green package without having to relocate to the US.
“I’ve spoken to my European friends, the heads of state. We’re not trying to deny them anything,” Biden said Thursday in Philadelphia.
Biden and von der Leyen are expected to agree Friday on a path toward a deal on minerals and raw materials that would allow European firms to benefit from some of the subsidies for electric-car batteries offered only to producers based in the US.
Negotiations will be limited in scope to relevant critical materials in specific supply chains and the agreement will have strong labor and environmental commitments, but the senior Biden administration officials declined to provide more details ahead of the meeting.
The final arrangement would allow the EU to qualify for benefits under the IRA law by meeting requirements defined by the Treasury Department, the officials said.
Ukraine
Dwindling stocks of ammunition and other military equipment will hover over the discussions of the war, now in its second year. The EU is trying to cobble together a strategy to step up production, but questions remain over funding and other details.
The allies are also discussing ways to maintain pressure on Russia. The leaders are expected to commit to deepen cooperation on sanctions enforcement and take new steps to target third countries that are supporting Russia’s war.
The EU is sending its envoy on sanctions enforcement to countries, including the United Arab Emirates and possibly Turkey, and the bloc is also discussing further ideas to prevent the flow of components and chips that could make their way to the Russian army.
In the slightly longer term, Washington and Brussels must agree on an approach for providing reliable financial support for Ukraine, as well as on planning the eventual reconstruction of the country. The EU arguably has more bureaucratic clout to help manage the billions that would be spent on such a project, but the US will want a central role.
Energy Security
Von der Leyen has been effusive in her praise of Biden’s help in addressing a European energy crunch provoked by Russia’s cutoff of natural gas supplies. The US has pledged to provide additional shipments of liquefied natural gas, among other steps.
Some European officials have quietly grumbled about the windfall profits that US energy producers are raking in, but von der Leyen is likely to focus on how the US can help the EU prepare for next winter. The pair may also discuss efforts to calibrate price caps that the EU and Group of Seven have imposed on Russian exports of crude oil and refined petroleum products like diesel.
China
Beyond trying to deter China from providing support to Russia, the US wants to continue to and build on forging a united front with Europe to counter what it sees as China’s assertive political and economic stances.
The US believes there is unprecedented alignment between the allies on concerns posed by China, including on economic coercion or other non-market practices, and the leaders are expected to speak to that topic in detail, the senior Biden administrations said.
After pressure from Washington to limit China’s access to certain kinds of valuable technology, the EU is now ready to discuss a bloc-wide approach to export controls on advanced chips. The discussion follows a move by the Netherlands to restrict some of its supplies.
Valdis Dombrovskis, a European Commission vice president, told reporters Thursday that he “could argue we need a stronger EU role to ensure coherence in our policy on security, trade and technology.”
Future Concerns
Beneath the surface, EU officials are also starting contemplate what its relationship with the US would be like if Biden is not reelected in 2024. Still scarred from the presidency of Donald Trump, Europe is contemplating how to deal with a less reliable ally in Washington.
Von der Leyen’s term also ends next year and it’s unclear whether she will seek — or get — another one. US officials have been very pleased with her leadership, particularly on Ukraine, and may not be eager to have to adapt to a different successor if the war continues.
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