Business Secretary Grant Shapps blasted US President Joe Biden’s multi-billion green subsidies package - just 24 hours after Number 10 hit out at the White House over anti-strike laws.
The Cabinet Minister warned the £350 billion scheme aiming for major investment into America could see a “dangerous” slide to protectionism if changes weren’t made.
US consumers will be given incentives to buy electric cars and warm their homes with heat pumps under the new law.
The warning comes after the EU, Canada and South Korea raised concerns that the scheme, which includes tax credits for eco technologies, is in breach of world trade rules.
Mr Shapps, speaking at a panel in Davos on industrial policy, said: “We are great global traders. We want the world to be as open as possible. It is very, very important that we don’t slip into protectionism.
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“That is where, at the edges, the Inflation Reduction Act in the US is dangerous because it could slip into protectionism.
“It’s not its intention, I don’t think it’s necessarily where it is going. But I think that’s where we have to be really careful.”
International Trade Secretary Kemi Badenoch has already written to the US government saying the move will “harm multiple economies across the world”.
Mr Shapps also told delegates in Switzerland that he wants to create an Amazon or a Google in Britain as he strives for economic growth.
But his outburst came after US Labor Secretary Marty Walsh hit out at the government’s legislation to introduce minimum safety levels for striking sectors.
But Downing Street retorted that the legislation did not inhibit the ability of unions to strike - whereas in the US, President Biden had taken action to stop a walkout by rail workers.