International opposition mounts over proposed U.S. EV tax credit, Auto News, ET Auto

By David Shepardson

WASHINGTON: The European Union, Germany, Canada, Japan, Mexico, France, South Korea, Italy and other countries wrote to U.S. lawmakers that a proposed U.S. electric vehicle tax credit violates international trade rules, according to a joint letter released on Saturday emerges.

A group of 25 ambassadors in Washington wrote to US lawmakers and the Biden administration late Friday that “restricting the creditworthiness of vehicles based on their US home assembly and local content is inconsistent with US multilateral WTO obligations -Agreement is compatible. “

US Congress is considering a new $ 12,500 tax credit, which would include $ 4,500 for union-made U.S. electric vehicles and $ 500 for U.S.-made batteries. According to a House of Representatives proposal released this 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 rejected 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 have their U.S.-made vehicles in unionized plants assemble.

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. EV consumer market to meet the (Biden) government’s climate targets.” reach”.

The letter added that it “penalizes US trading partners”.

The auto workers at the overseas automakers in the countries that have written are almost all unionized, but not in the United States.

“Our governments support the right of workers 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.