In the fall of 2022, two top Biden administration officials met in New York with a key European diplomat. Over dinner outdoors, they strategized about how best to throttle Russia’s oil revenues in retaliation for its invasion of Ukraine.
Near 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 Treasury secretary. Europe, Mr. Seibert said, had big problems with President Biden’s sweeping new climate law.
Mr. Seibert, the head of cabinet for the president of the European Commission, said top officials among European Union member states feared Mr. Biden was trying to drive a competitive wedge between their countries and the United States, by lavishing subsidies on made-in-America clean energy technology. They were worried the president was trying to ensure 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 fellow world leaders, all meant to soothe those concerns.
The officials at that dinner worked to pull together a harmonized industrial strategy between wealthy nations. It seeks to boost technology that reduces greenhouse gas emissions, limit global warming and counter China’s manufacturing might in global markets.
That effort appears to have partly repaired a trans-Atlantic rift over what Europe sees as America’s increasingly protectionist economic policies.
Leading the way for the administration was Mr. Pyle, an under-the-radar aide on the National Security Council 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 putting in place 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 operational details of an untried effort to limit Russia’s revenues from global oil sales. It spanned a range of administration attempts to forge a global alliance to outcompete China.
And over the course of a frantic nine months, Mr. Pyle led an effort to quell fury among American allies over the Inflation Reduction Act.
“There was a wave of concern initially from partners around the world who really didn’t understand this legislation and the president’s agenda,” Lael Brainard, who heads Mr. Biden’s National Economic Council, said in an interview. Mr. Pyle, she said, “jumped into action, jumped on airplanes and did a huge amount of shuttle diplomacy.”
The deputy national security adviser for economic affairs leads negotiations on declarations at international summits, often working months in advance to smooth over disagreements with allies.
That’s why Mr. Pyle was on the receiving end of Mr. Seibert’s warning about the Inflation Reduction Act. European leaders had initially welcomed the law, the largest investment ever by the United States in fighting climate change, through tax credits and other subsidies meant to speed the deployment of clean energy. But European officials quickly came to see some of those subsidies, like for electric vehicles, as discriminatory — they were reserved for products made and sourced in America, or within close trading partners like Canada and Mexico.
Mr. Pyle acknowledged the concerns but quickly pushed back. He told Mr. Seibert that Mr. Biden was hoping to lead a coordinated effort to subsidize manufacturing of low-emissions technology. He suggested how the administration might immediately start working to make sure companies in allies like the European Union, Japan and South Korea could benefit from the American climate law.
Mr. Pyle explained the law to allies and began “thinking through how we can design a way to work together,” Mr. Adeyemo recalled.
In meetings over the ensuing months, Mr. Pyle and his colleagues laid out steps they hoped would ease Europe’s climate-law concerns. They previewed a Treasury Department regulation — before it was announced publicly — that would allow leased electric vehicles, including from European and Asian carmakers, to essentially qualify for a full consumer tax credit under the law.
They also sketched the outlines of a new sort of limited trade deal that the European Union, United Kingdom and Japan could sign with the United States to allow their companies to share in other tax breaks from the Inflation Reduction Act. Mr. Pyle would help to craft the template for those limited trade arrangements.
“He knows his stuff very well,” Mr. Seibert said. “He knows what’s politically possible in the United States.”
The meeting paved the way for a joint declaration on energy and climate cooperation from Mr. Biden and Ursula von der Leyen, the president of the European Commission, and a declaration from Group of 7 leaders that they were taking steps to “drive the transition to clean energy economies of the future through cooperation.”
Mr. Pyle said the progress pleased him, but tensions over the law are still “a work in progress.”
Mr. Biden, he said, “is advancing a new model for today’s challenges, and one that tests old rules with new types of solutions. That’s hard.”
Source Agencies
