The Inflation Reduction Act (IRA), enacted in 2022, aims at promoting the production and adoption ofclean energy in the United States, fostering job creation, and effectively addressing competitive pres-sures from China. This ambitious response of the US to the issue of climate change is welcome. Yet,the IRA’s local content requirements have drawn criticism because they conflict with principles outlined by theWorld Trade Organization (WTO). Moreover, the IRA creates economic distortions in foreign direct investmentand might prompt European companies to relocate their operations to the United States. The IRA has stirreda strong debate about the future of European industrial policy because it poses new and fundamental challen-ges and demands careful rethinking of European industrial strategy. The conundrum is the following: how canEurope manage its Green Transition while strengthening its economic and strategic resilience, preserving jobsand productivity growth, and maintaining European solidarity and international coordination?