By Steve Holland and Michel Rose
WASHINGTON (Reuters) - U.S. President Joe Biden and French President Emmanuel Macron will celebrate more than 200 years of U.S.-French relations on Thursday but simmering in the background is a dispute over new American subsidies that has riled Europe.
Biden is hosting Macron at the first state visit since the U.S. leader took office in early 2021. Biden and his wife Jill are playing up the pageantry with a colorful arrival ceremony planned and 200 live lobsters flown in from Maine for a glittering state dinner.
The two leaders are to hold talks then conduct a joint news conference at 11:45 a.m. EST (1645 GMT). Macron and his wife, Brigitte, arrived in Washington on Tuesday for his second state visit to the United States since taking office in 2017.
Biden, 80, and Macron, 44, have had many meetings at international gatherings but this will be the most amount of time they have spent in each other's company.
The two leaders dined together on Wednesday night at an Italian restaurant called Fiola Mare in the historic Georgetown area in a gesture of bonhomie.
Macron is expected to raise French and European concerns about subsidies in Biden's Inflation Reduction Act (IRA), a $430 billion bill that offers massive subsidies for U.S.-made products and is aimed at addressing the climate crisis.
European leaders say the legislative package signed by Biden in August is unfair to non-American companies and would be a serious blow to their economies as Europe deals with the fallout from Russia's February invasion of Ukraine.
In a meeting on Wednesday with U.S. lawmakers at the Library of Congress, Macron said the act was "super aggressive" toward European companies, one participant told Reuters on condition of anonymity.
Macron told the French community in Washington that the cost of the war in Ukraine was much higher in Europe than in the United States and that Europe risked falling behind if the subsidies siphoned new investments. This could "fragment the West," he said.
There was no sign that Biden was prepared to make concessions.
White House spokesperson Karine Jean-Pierre said the legislation "presents significant opportunities for European firms as well as benefits to EU energy security," when asked about European concerns.
Macron is the first foreign leader to be given a state dinner at the Biden White House, a sign of his importance to Washington despite some differences with the Biden administration.
The formal dinner in a pavilion on the White House South Lawn will feature music from Jon Batiste, Chardonnay from the Napa Valley and cheeses from Oregon, California and Wisconsin.
Russia's invasion of Ukraine will most likely be a major topic in the talks. Both leaders have sought to bolster support for the Ukrainian military.
Macron's visit came as NATO ministers met in Bucharest and pledged more aid to Ukraine to help against Russia's attacks on energy infrastructure as winter bites.
The alliance, of which the United States and France are founding members, was also discussing how to address challenges posed by China's military buildup and its cooperation with Russia, U.S. Secretary of State Antony Blinken said. Macron has said in the past that China should not be a focus for NATO.
(Reporting By Steve Holland and Michel Rose; Additional reporting by Jeff Mason)