The quiet diplomat who shaped Biden's global economic policy
In the fall of 2022, two top Biden administration officials met with a key European diplomat in New York. Over an outdoor dinner, they discussed the best way to limit Russian oil revenues in retaliation for the invasion of Ukraine.
Towards 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 major problems with President Biden's sweeping new climate law.
Mr Seibert, the chief of staff to 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 providing subsidies to made-in -America clean energy technology. They were concerned that the president wanted to secure the future of American manufacturing at the expense of some of America's closest allies.
The exchange marked the start of months of behind-the-scenes talks, a major concession on Treasury Department regulations and high-level negotiations between Mr. Biden and fellow world leaders, all aimed at addressing those concerns.
The officials at that dinner were working on a harmonized industrial strategy for the rich countries. It aims to boost technology that reduces greenhouse gas emissions, limits global warming and counters Chinese manufacturing power in global markets.
That effort appears to have partially repaired a transatlantic rift over what Europe sees as America's increasingly protectionist economic policies.
Taking the lead for the administration was Mr. Pyle, an under-the-radar aide to 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 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 economic affairs included piecing together some of the operational details of an untested effort to limit Russia's revenue from global oil sales. It included a series of government efforts to forge a global alliance to defeat China.
And over the course of a hectic nine months, Mr. Pyle led an effort to quell anger among American allies over the Inflation Reduction Act.
“There was an initial wave of concern from partners around the world who really didn't understand this legislation and the president's agenda,” Lael Brainard, head of Biden's National Economic Council, said in an interview. Mr. Pyle, she said, “sprang into action, jumping on planes and doing a tremendous amount of shuttle diplomacy.”
The Deputy National Security Advisor for Economic Affairs leads negotiations on statements at international summits, often working months in advance to iron out differences with allies.
That is 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-ever investment by the United States in the fight against climate change, through tax credits and other subsidies aimed at accelerating the deployment of clean energy. But European officials quickly came to view some of these subsidies, such as for electric vehicles, as discriminatory — reserved for products made and produced in America, or within close trading partners like Canada and Mexico.
Mr. Pyle acknowledged the concerns but quickly backed down. He told Mr. Seibert that Mr. Biden hoped to lead a coordinated effort to subsidize the production of low-emissions technology. He suggested how the administration could start working immediately to ensure that companies in allies like the European Union, Japan and South Korea can benefit from the U.S. climate law.
Mr. Pyle explained the law to allies and began “thinking about how we can design a way to work together,” Mr. Adeyemo recalled.
During meetings in the following months, Mr. Pyle and his colleagues are taking steps that they hoped would address European concerns on climate law. They previewed a Treasury Department scheme — before it was publicly announced — that would essentially make leased electric vehicles, including from European and Asian automakers, eligible for a full consumer tax credit under the law.
They also outlined the outlines of a new kind of limited trade deal that the European Union, the United Kingdom and Japan could sign with the United States to let their companies share in other tax benefits from the Inflation Reduction Act. Mr. Pyle would help set the template for these limited trading arrangements.
“He knows his business very well,” Mr. Seibert said. “He knows what is politically possible in the United States.”
The meeting paved the way for one 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 Seven that they are taking steps to “drive the transition to clean energy economies of the future to encourage cooperation.”
Mr. Pyle said he liked 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, one that tests old rules with new kinds of solutions. That's difficult.”