March 25, 2023

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Ira, openness in the United States does not mean closure in the European Union

The United States needs to import European technologies to implement the Inflation Reduction Act (IRA), a trillion-dollar reconstruction plan. On the contrary, European companies need to expand into reliable and stable markets. Analysis by Lucio Miranda, President of Export Usa

From new technologies, to the transition to electricity until the development of a sustainable economy, theInflation Reduction Act (IRA) is a federal investment plan (Kinsey style) that will give new life to the American economy, attracting investments from all over Europe. This is an important opportunity that will primarily look at importing chips, industrial goods, machinery, capital goods, components and automation into the states, as well as technologies for production activities. All sectors in which Italy has historically excelled: this new cycle will inevitably strengthen trade relations with the United States.

The IRA includes substantial federal incentives to open plants in the United States, in addition to those already available at the state level. In our opinion, opening a production plant in America does not mean closing in Europe. On the contrary, opening up in the United States makes it possible not to close in Europe, to seize the opportunity that will allow us to remain open, to hire new employees, to invest in research and innovation to feed that. know how It is what sets our companies apart, allowing us to continue to grow both internationally and nationally.

Another essential element to consider is that part of the investments envisaged underInflation Reduction Act (and all other investment plans launched by the Biden administration) will lead to an increase in US imports. So the benefits of an IRA would also extend to all those companies that don’t necessarily plan to open production plants in America.

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Therefore, the IRA also represents an excellent opportunity for those small and medium Italian companies that want to export industrial goods abroad, without necessarily having to open a production plant. Obviously, to seize this opportunity, you must be prepared. To operate successfully in this sector requires setting up your own company in the United States, with a US checking account, and product liability insurance that is underwritten by a US insurance company.

We say this with 20 years of experience working in the United States. It is much less complicated and costly to open and run a company registered under US law than in Italy. Moreover, in terms of taxes, the advantages are tangible. Profits derived from a business carried on in the United States are, in fact, only taxable in the United States, [Art. 7 della Convenzione tra il governo della Repubblica italiana e il governo degli Stati Uniti d’America per evitare le doppie imposizioni in materia di imposte sul reddito e per prevenire le frodi o le evasioni fiscali. Accordo ratificato con legge 3 marzo 2009 n.20 e pubblicato in Gazzetta Ufficiale n. 64 del 18/03/2009)] where the percentage is 21% level For companies that fully comply with Italian joint stock companies. Finally, dividends paid to the parent company are 95% tax deductible in Italy, while in America, expenses incurred by the American subsidiary are fully deductible even if they are incurred abroad.

With this frame of reference in mind, two factors favor Italian companies in particular: the first factor is related to the nature of the IRA which mainly targets production infrastructure and therefore favors Italy’s entry in this direction of exports and sales to the American market .

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On the other hand, the second factor has a different connotation and goes back to Covid, which highlighted the risks and limitations of traditional supply chains. In addition to the purely technical aspects that have seen many discussions about the future supply chainsthe need to respond to the global challenge posed by the Chinese economy prompted the US government to prefer supplies from friendly countries (friendship(with the reshaping of entire industrial sectors in America)Resettlement), previously transferred en masse to low-cost countries, such as in China.

Basically, the United States needs to import our technologies to implement a trillion-dollar reconstruction plan. On the contrary, European companies need to expand into reliable and stable markets: the inter-relationship. All of these elements will enhance trade relations between the EU and the US. This is why it is wrong to see the IRA as a threat to our economy.