© Reuters. File photo: On January 26, 2015, an electric car is charged in the parking lot of the University of California, Irvine. REUTERS/Lucy Nicholson/File Photo
(Reuters)-The Office of the United States Trade Representative said on Friday that although Mexico and Canada opposed the proposed tax credits for electric vehicles made by US union workers, it is still committed to passing legislation to strengthen the domestic electric vehicle industry.
The proposed $12,500 electric vehicle tax credit will include $4,500 for electric vehicles manufactured by union workers in the United States, and the policy will take effect after 2027. It has been included in the comprehensive climate and social expenditure legislation currently under consideration by Congress in the Biden administration.
Canadian Trade Minister Mary Ng told Reuters on Friday that Canada still has some leeway https://www.reuters.com/markets/commodities/canada-still-has-time-act-before-us-vote-disputed-ev -tax-credit-trade-min-2021-12-03 Persuade the U.S. Senator to prevent the U.S. Senate from approving the specific electric vehicle provisions set by the U.S. labor union passed by the House of Representatives.
She said that Canada “will respond accordingly” if the bill is passed, but did not specify the details. She added that the proposed credit violates the U.S.-Mexico-Canada trade agreement and will undermine Canada’s efforts to produce electric vehicles.
Her comments echoed those of Tatiana Clouthier, Mexico’s Minister of Economy, who said that tax credits are “discriminatory” and that Mexico analyzed a series of legal options https://www.reuters.com/business/autos-transportation /mexico-may-impose -tariffs-over-proposed-us-electric-car-tax-credit-2021-12-02 In response, tariffs may be included.
“In the past we imposed tariffs, we had to do or propose some very important and strategic things for these products, in those places that hurt them… so that the consequences can be felt,” Cloutier said in the news Said at the press conference.
She added that this is “completely contrary to free trade”, having previously accused the United States https://www.reuters.com/world/americas/mexican-minister-chides-us-protectionism-ahead-summit-2021-11 -17 Pursuing the protectionist policies she described may backfire and stimulate more immigration to the U.S. border.
Katherine Tai, the U.S. Trade Representative, stated that she is aware of the objections of trading partners and is discussing the matter with them, but did not specify whether she supports the proposed U.S. union’s electric vehicle tax credit.
“The Biden-Harris administration is committed to responding to the threat of climate change by supporting the transition to electric vehicle manufacturing,” Adam Hodge, a spokesman for the Office of the United States Trade Representative, said in a statement.
He added: “As Congress considers legislation to strengthen America’s leadership in the industry, we will continue to engage with a range of stakeholders, including our close trading partners.”
In late October, Mexico, together with the European Union, Germany, Canada, Japan, France, South Korea, Italy and other countries, wrote to U.S. congressmen https://www.reuters.com/business/autos-transportation/international-opposition- mounts-proposed- us-ev-tax-credit-2021-10-30 says that the proposed electric vehicle tax credit violates international trade rules.
The proposal was supported by U.S. President Joe Biden, the American Union of Auto Workers (UAW) and many congressional Democrats, but it was opposed by major international automakers, including Toyota Automotive (NYSE:) Company, Volkswagen (OTC:), Daimler AG (DE:), Honda Motor Company, Hyundai Motor Company and BMW Company.
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