The EU urged the United States on Monday to grant its firms special status to sell electric vehicles, as Brussels railed at "discriminatory" measures in U.S. President Joe Biden's flagship economic plan.

The 27-nation bloc is upset about Washington's "Inflation Reduction Act", which will see vast spending on green energy initiatives and includes tax breaks for U.S.-made electric cars and batteries.

Brussels says those benefits for American electric vehicle makers would put electric cars made in the EU at an unfair disadvantage on the lucrative U.S. domestic market.

After talks between the bloc's trade ministers and U.S. Trade Representative Katherine Tai in Prague, EU officials said European cars should get the same exemptions as those from Canada and Mexico.

"We have to be realistic and see what we can negotiate," said Czech Industry and Trade Minister Jozef Sikela, whose country holds the EU's rotating presidency.

He branded the U.S. measures as they stood as "unacceptable."

Brussels and Washington have set up a task force to try to hammer out a solution. It is set to hold its first meeting this week.

"It probably will not be easy to fix it, but fix it we must," said EU Trade Commissioner Valdis Dombrovskis. "We will give negotiations a chance before engaging in further considerations."

France's Foreign Minister Catherine Colonna sounded the alarm earlier this month over the massive U.S. spending package which will pump $370 billion into green energy, saying it risked unfair competition.

German Chancellor Olaf Scholz also warned that U.S. climate protection plans would shield domestic companies from foreign competition and could trigger "a huge tariff war."

(Source: AFP with edits)