Reuters.- The Trade Representative’s office said Friday that the United States is committed to legislation that strengthens the electric vehicle industry despite the inclusion of a tax credit that has provoked threats of retaliation from Mexico, which qualifies it as “discriminatory.”
The proposed $ 12,500 electric vehicle tax credit would include $ 4,500 for cars built in America by unionized workers, effective 2027. It is included in the broad climate and social spending legislation of the administration of President Joe Biden that is under review by Congress.
Economy Secretary Tatiana Clouthier said that the tax credit is “discriminatory” and that it would violate the trade agreement between the United States, Mexico and Canada.
Mexico is analyzing a series of legal actions in response that may include tariffs, the official said.
“In the past we have effectively imposed tariffs and we would have to do or raise something very important and strategic in those products, in those places where the other side also hurts (…) So that the consequences are felt ”, he pointed out.
“It is not desirable when we are wanting to build a strong North America to cope with global circumstances,” he added.
Clouthier argued that the measure is totally contrary to free trade and that he had already reprimanded Washington for applying what he described as protectionist policies that could be counterproductive and cause more migration to the US border.
United States Trade Representative Katherine Tai has said that is aware of objections from Washington’s trading partners and that the matter is being discussed with them.
“The (United States) government is committed to addressing the threat of climate change by supporting the transition to electric vehicle manufacturing,” said USTR spokesman Adam Hodge. “We will remain engaged with stakeholders, including our business partners, as Congress studies the legislation.”
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In late October, Mexico, the European Union, Germany, Canada, Japan, France, South Korea, Italy and other countries wrote to US lawmakers saying the proposed EV tax credit violates international trade rules.
The proposal has been endorsed by Biden, the United Auto Workers (UAW) and many Congressional Democrats, but it is rejected by automakers such as Toyota Motor Corp, Volkswagen AG, Daimler AG, Honda Motor Co, Hyundai Motor Co and BMW AG.
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