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 cut Russia’s oil revenue in retaliation for its invasion of Ukraine.
Near the end of the joint lunch, the European official, Bjoern Seibert, dropped a bombshell on his hosts, Mike Pyle of the National Security Council and Wally Adeyemo, the deputy finance minister. Europe, Mr. Seibert said, had big problems with President Biden’s sweeping new climate law.
Mr Seibert, the head of the European Commission president’s cabinet, said top officials in European Union member states feared Mr Biden was trying to drive a competitive wedge between their countries and the United States by giving lavish subsidies to manufactured products. -American clean energy technology. They worried that the president was trying to secure the future of American manufacturing at the expense of some of America’s closest allies.
The exchange triggered months of behind-the-scenes talks, a major regulatory concession from the Treasury Department and high-level negotiations between Mr. Biden and other world leaders, all aimed at allaying those concerns.
Officials at that dinner worked to create a harmonized industrial strategy among rich nations. It seeks to boost technology that reduces greenhouse gas emissions, curbs global warming and counters China’s manufacturing power in global markets.
That effort appears to have partially mended a transatlantic rift over what Europe sees as America’s increasingly protectionist economic policies.
The frontrunner for the administration was Mr. Pyle, an 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 has played a huge role in implementing 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 pulling together some of the operational details of an untested effort to limit Russia’s revenue from global oil sales. It covered a series of attempts by the administration to forge a global alliance to overcome China.
And during a frantic nine months, Mr. Pyle led an effort to quell anger among America’s allies over the deflationary law.
“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, head of Mr. Biden’s National Economic Council, said in an interview. Mr Pyle, he said, “jumped into action, jumped on planes and did a huge bus diplomacy”.
The deputy national security adviser for international economic affairs leads negotiations for declarations at international summits, often working months in advance to iron out differences with allies.
That’s why Mr. Pyle was on the receiving end of Mr. Seibert’s warning about the deflationary law. European leaders had initially welcomed the law, the largest-ever investment by the United States to fight climate change, through tax breaks and other subsidies intended to accelerate the development of clean energy. But European officials quickly saw some of those subsidies, such as for electric vehicles, as discriminatory — intended for products made in and coming from America or close trading partners like Canada and Mexico.
Mr Pyle acknowledged the concerns but quickly pushed back. He told Mr. Seibert that Mr. Biden hoped to lead a concerted effort to subsidize low-emission technology manufacturing. He suggested how the administration could immediately start working to ensure that companies in allies such as the European Union, Japan and South Korea could benefit from US climate legislation.
Mr. Pyle explained the law to the allies and began “thinking about how we can design a way to work together,” Mr. Adeyemo recalled.
In meetings over the coming months, Mr Pyle and his colleagues presented steps they hoped would ease Europe’s climate concerns. They previewed a Treasury regulation — before it was publicly announced — that would allow leased electric vehicles, including from European and Asian automakers, to effectively qualify for a full consumer tax credit under the law.
They also outlined the contours of a new kind of limited trade deal that the European Union, Britain and Japan could sign with the United States to allow their companies to take part in tax breaks other than the deflationary law. Mr Pyle would help set the standard for these limited trade arrangements.
“He knows his stuff very well,” Mr. Seibert said. “He knows what is politically possible in the United States.”
The meeting paved the way for a joint statement on energy and climate cooperation from Mr Biden and Ursula von der Leyen, the president of the European Commission, and a statement from the leaders of the Group of 7 that they are taking steps to “ lead the transition to clean energy economies of the future through cooperation.”
Mr Pyle said he was pleased with the progress, but tensions over the law were still “a work in progress”.
Mr. Biden, he said, “is promoting a new model for today’s challenges and one that tests old rules with new types of solutions. This is hard.”
