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With the newly released Industrial Accelerator Act (IAA), the European Commission seeks to bolster the EU’s competitiveness, limit strategic dependencies and strengthen its industrial base. While it aims to address legitimate concerns about overcapacity and non-market practices undermining Europe’s industry, the uncertainty and new administrative hurdles it creates risk chilling investment decisions and thereby negating the intended benefits.

‘Parts of the IAA have the potential to garner high-quality investments, foster innovation and keep Europe on the road towards decarbonisation,’ said Malte Lohan, CEO, American Chamber of Commerce to the European Union (AmCham EU). ‘To succeed, the EU must steer away from disproportionate and discriminatory requirements and keep the Single Market open to US companies that contribute to European prosperity and strategic priorities.’

With €4 trillion in investment, US companies represent the largest source of foreign direct investment into Europe and are fully integrated into EU supply chains, responsible for cutting-edge innovation and creating value across strategic sectors in the EU. Their contributions are critical for enhancing Europe’s economic resilience and security.

Yet the IAA risks making it more difficult, instead of easier, for Europe to attract the capital necessary to improve resilience and strengthen its industrial base. The proposal includes blanket restrictions on investments that may duplicate and undermine existing transaction review instruments, including investment screening, merger control and the Foreign Subsidies Regulation. The EU is already optimising each of these instruments for its strategic priorities. Instead of adding an additional screening layer, the Commission should assess the effectiveness of the current transaction review framework once the ongoing changes have been implemented and consider ways to improve existing tools to better serve EU-added value.

The IAA’s requirements about content equivalency could also introduce significant uncertainty for all firms with a global footprint that are part of complex, integrated and cross-border supply chains. The Commission’s recognition of the importance of reciprocal trade and public procurement commitments is positive. However, failing to directly clarify in the proposal whether companies with a global footprint can access European public procurement could adversely impact both supply chain security and trade relations.

Only through sufficient legal clarity followed by an implementation process based on sound economic analysis can the IAA grow critical industry in Europe and help diversify access to best-in-class technology. American companies, as an integral part of Europe’s industrial fabric, stand ready to engage with policymakers on how to focus the IAA to strengthen industrial competitiveness.

For more context, read our latest position on Defining 'Made in Europe'.

Will Europe choose alignment or fragmentation in foreign investment screening? In a recent blog for fDi Intelligence, Malte Lohan, CEO, and Andrew Hill, Senior Policy Adviser, AmCham EU, examine how divergent national regimes have created legal uncertainty and unnecessary administrative burden for investors and authorities alike. Today’s patchwork encourages over-notification, overwhelms regulators with low-risk cases and introduces avoidable friction for capital. The revised EU Foreign Investment Screening Regulation presents an opportunity to enhance coherence and competitiveness. Its success will depend on consistent implementation across Member States. Convergence would streamline beneficial investment and strengthen the Single Market, while gold-plating risks renewed fragmentation. Read the full op-ed in fDi Intelligence’s Economic Security Watch.

Ahead of Ireland assuming the Presidency of the Council of the EU in July, Thibaut L’Ortye, Chief Policy and Public Affairs Officer, AmCham EU joined business and policy leaders at the AmCham Ireland’s Global Business Conference to reflect on the opportunities facing Europe’s economy. Against a complex geopolitical backdrop, the conversation looked at how forthcoming EU initiatives can strengthen Europe’s attractiveness for investment and long-term growth. From simplification efforts and the Industry Accelerator Act to the 28th regime, the Biotech Act and progress on the Savings and Investment Union, the scale of the agenda is significant. A renewed focus on deepening the Single Market was a clear priority, alongside maintaining openness to foreign investment as a driver of innovation, competitiveness and a stronger industrial base across Europe. Joining Mr L’Ortye on the panel was Lucinda Creighton, Founder and CEO, Vulcan Consulting and Colm O'Callaghan, Director of Public Affairs and Advocacy, AmCham Ireland.