In a letter to US senators, Deputy Prime Minister Chrystia Freeland stated Ottawa is “deeply concerned” by an electrical automobile tax credit score proposed within the Build Back Better Act, which she says is in violation of the United States-Mexico-Canada settlement. does.
Canada on Friday threatened to impose sweeping tariffs on American items and droop elements of a historic North American commerce deal if Washington rewards electrical vehicles made in US consortium shops to the detriment of Canada’s auto sector.
In a letter to US senators, Deputy Prime Minister Chrystia Freeland stated Ottawa is “deeply concerned” by an electrical automobile tax credit score proposed within the Build Back Better Act, which she says is in violation of the United States-Mexico-Canada settlement. does.
The proposed tax credit score is equal to a 34 % tariff on Canada’s assembled electrical autos, Freeland stated, including that it “poses a significant threat to the Canadian automotive industry and a genuine repeal of the USMCA.”
The proposal, included in US President Joe Biden’s $1.75 trillion spending bundle pending in Congress, encourages US manufacturing of electrical autos by providing a bigger tax credit score for native union-built electrical autos (EVs) and 5 years later. Phased out for imported EVs.
Freeland stated the proposed tax credit score is equal to a 34% tariff on Canada’s assembled electrical autos.
Mexico and Canada have argued it poses a risk to the joint North American auto provide chain enabled by the USCMA after tortuous negotiations signed in 2020.
Non-federal automakers, led by Toyota and Tesla, have additionally balked at Biden’s proposal, calling it a sop to the United Auto Workers labor union that would hinder the transition to EV autos.
If the measure is handed, Freeland stated Canada may impose retaliatory tariffs on the US auto trade and a number of other different sectors, droop US entry to the Canadian dairy market, and block the implementation of latest copyright guidelines on the USMCA. Is.
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Freeland stated a listing of US merchandise dealing with Canadian tariffs can be launched within the coming days.
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With inputs from NDTV
