Canadian auto industry would be seriously impacted by U.S. proposed EV tax credits plan
Ottawa could impose tariffs in retaliation
United States President Joe Biden and his administration is currently seeking Congress approval for a revised electric vehicle tax credit plan that Ottawa says could seriously impact the Canadian automotive industry.
The Build Back Better Act proposes an additional tax credit on electric vehicles built in the U.S. in factories represented by a labour union of $4,500 per vehicle. This would bring the total available EV tax credit to $12,500 and hurt vehicles built outside of the U.S.
The proposed plan would put automakers who build vehicles outside of the U.S. a serious disadvantage, and numerous countries have voiced their concerns in recent weeks. Mexico called the plan “discriminatory” while the European Union has asked the US to not go forward with the proposed bill.
Canadian Deputy Prime Minister Chrystia Freeland and Trade Minister Mary Ng sent a letter to the U.S. Senate last week, voicing their concerns for the plan and making it clear that if there was no satisfactory resolution, tariffs would be imposed on U.S. goods coming into the country.
“Canada will have no choice but to forcefully respond by launching a dispute settlement process under the USMCA and applying tariffs on American exports in a manner that will impact American workers in the auto sector and several other sectors of the U.S. economy,” the letter said as per Automotive News Canada.
