Prime Minister Justin Trudeau Canada said “slightly concerned” about US President Joe Biden’s proposed an electric vehicle tax credit for American-made vehicles, and he plans to have a conversation with Biden about the matter “today.”
Trudeau made the comments Wednesday shortly before meeting Biden and Mexican President Andres Manuel Lopez Obrador – the first to be referred to as “Three Amigos” since 2016.
“We’re a bit concerned about the zero-emission vehicle mandates or rebates set out in the current proposal in Parliament right now,” Trudeau said, speaking during a Q&A session hosted by China. Wilson Center held in Washington.
“But it’s part of the conversations we’re going to have today to make sure people understand that doing this together is good for all of us, good for work, good for the future as we fight climate change, as we build prosperity in North America. ”
The proposal, which has yet to be passed into law, looks set to establish incentives of US$4,500 for union-made vehicles and US$500 for US-made batteries, with an additional discount of US$5,000. .
The vehicles would have to be manufactured in the United States starting in 2027 to qualify for the electric vehicle tax credit, which Biden proposed would increase from $7,500 to $12,500.
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According to Maryscott Greenwood, CEO of the Canadian American Business Council, who told Global News from the venue of the “Three Amigos” summit, this kind of protectionism is “nothing new.” “.
“What’s important in this week’s dialogue with the three leaders is that they had a real conversation about the extent of our economic integration and how our economies can maximize profits. benefit from our trade agreement,” Greenwood said.
“It’s going to be a very active discussion.”
North America’s auto manufacturing industry is extremely integrated. According to the Canadian Vehicle Manufacturers Association (CVMA), auto parts and components can cross the borders of Mexico, the United States and Canada “as many as eight times” before finally being assembled in one of the partner country.
“The truth is that jobs in the United States and jobs in Canada are dependent on each other. That’s why any of these disparities, as economists call them, are severe,” Greenwood said.
“We don’t want policies that will be detrimental to people in Canada or in the United States, so we have to look at all of this carefully.”
The vast majority of vehicles made in Canada are also sold in the United States, meaning any jump in protectionist sentiment from our southern neighbors could pose a serious threat to our country. Canadian auto industry.
According to CVMA, vehicles are Canada’s second-largest export by value, at $42.9 billion in 2020 – and 93% of that is exported to the US.
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Cara Clairman is the president and CEO of Plug’n Drive, a nonprofit that works to accelerate the rollout of electric vehicles. While she welcomes any policy that encourages electric vehicle purchases, she says she’s heard concerns from the industry about the proposed rebates.
“I’ve certainly heard it as a concern, but I think people still hope that it won’t be as accurate as it is now,” she said.
Instead of taking a “buy America” approach, manufacturers would instead want to see the Biden administration take a “buy North America” push, Clairman said.
“I hope that the language will be inclusive (and) just say ‘North American vehicles’ instead of ‘American vehicles,’ because the auto industry is extremely integrated across borders,” she said. speak.
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However, the details of the tax credit have yet to be finalized, so the real impact of the rebate remains to be seen, according to Greenwood.
“We’re going to have to really look and see, not just at what was announced from a podium, but what was actually in the letter of the regulations,” she said.
“And hopefully it will be in line with our obligations.”
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Greenwood warned there was a possibility that the details of the regulation could violate trade agreements Canada has signed with the United States.
“If it doesn’t align with our commercial obligations, then we will have some litigation,” she said.
Canada has not ruled out taking those steps.
22 letter, Canada’s Commerce Minister Mary Ng told US lawmakers and the Biden administration that the credits, if passed, “would have a major negative impact on the future.” of automobile and electric vehicle production in Canada.”
Ng added that the proposed rebates are inconsistent with US obligations under USMCA and the World Trade Organization.
Innovation Minister Francois-Philippe Champagne has also warned US officials that Canada will respond “appropriately” if the tax credit is approved.
“They understand that such legislation will generate a reaction from the Canadian side,” he said.
– With files from Reuters
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https://globalnews.ca/news/8380724/trudeau-biden-buy-american-ev-tax-credit/ | Trudeau ‘a bit concerned’ about Biden’s US-purchased electric vehicle tax credit – National