Proposed US EV Tax Credit Denied Globally | Economic and business news


Opponents say the U.S. plan for a new $ 12,500 tax credit for U.S.-built electric vehicles is inconsistent with WTO commitments.

The European Union, Germany, Canada, Japan, Mexico, France, South Korea, Italy and other countries have written to US lawmakers in a joint letter that a proposed US electric vehicle tax credit violates international trade rules.

A group of 25 ambassadors in Washington wrote to US lawmakers and the Biden administration late Friday, saying, “Limiting credit to vehicles based on their US home assembly and local content is contrary to US Commitments entered into under the multilateral WTO agreements ”.

US Congress is considering a new $ 12,500 tax credit that would include $ 4,500 for union-made U.S. electric vehicles and $ 500 for U.S.-made batteries. According to a House proposal published last week, only US-built vehicles would be eligible for the $ 12,500 loan after 2027.

Canada and Mexico made separate statements against the plan last week. The U.S. State Department declined to comment on Saturday and the White House did not immediately respond to a request for comment.

The proposal is supported by President Joe Biden, the United Auto Workers (UAW) and many Democrats in Congress, but has been opposed by major international automakers including Toyota Motor Corp, Volkswagen AG, Daimler AG, Honda Motor Co, Hyundai Motor Co and BMW AG.

A dozen overseas automakers wrote to the two California senators on Friday urging them to abandon the plan they said would discriminate against the state.

UAW President Ray Curry said the rule will “create and maintain tens of thousands of jobs for UAW members” and “would be of benefit to auto-manufacturing workers.”

The electric vehicle tax credits would cost $ 15.6 billion over 10 years and would disproportionately benefit Detroit’s big three automakers – General Motors, Ford Motor, and Chrysler parent Stellantis NV – who sell their US-made vehicles in assemble unionized factories.

The ambassadors, which include Poland, Sweden, Spain, Austria, the Netherlands, Belgium, Cyprus, Ireland, Malta, Finland, Romania and Greece, said the legislation would harm international automakers.

They said it would “violate international trade rules, penalize hard-working Americans employed by these automakers, and undermine the efforts of those automakers to expand the U.S. consumer electric vehicle market to meet the (Biden) government’s climate targets.” reach”.

The letter added that it “puts US trading partners at a disadvantage”.

The auto workers of foreign automakers in the countries that wrote the letter are almost all unionized, but not in the United States.

“Our governments support workers’ right to organize. It is a fundamental right and should not be used as a tax incentive to neglect the opportunities for nearly half of American auto workers, ”they wrote.


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