Trudeau proposes to Canada and the United States to harmonize discounts on electric vehicles, Auto News, ET Auto

The proposed U.S. tax credit is included in President Joe Biden’s $ 1.75 trillion spending envelope pending in Congress.

Canadian Prime Minister Justin Trudeau said on Monday he had proposed harmonizing discounts with the United States for electric vehicles to avoid a trade dispute over Washington’s self-determination plan that threatens to destroy the auto industry Canadian.

His remarks followed threats of tariff retaliation on U.S. goods and Ottawa’s suspension of parts of the historic North American Free Trade Agreement if Washington moved forward with tax credits on U.S. goods. electric vehicles for electric vehicles manufactured in American union stores.

“Canada and the United States have been making cars together for over 50 years now. Our supply chains are deeply integrated,” Trudeau said at a press conference. “This is why we are working very hard with the United States to make them understand that this discount offered for electric vehicles for American-built cars is obviously not good for Canada, but not for the United States either. United, ”he said.

Trudeau added that “a number of solutions” have been suggested to Washington, including “aligning our incentives in Canada and the United States to ensure that there is no slippage or unfair advantages in ‘one side or the other “.

The proposed U.S. tax credit is included in President Joe Biden’s $ 1.75 trillion spending envelope pending in Congress. This would encourage U.S. production of electric vehicles by providing a larger tax credit for electric vehicles (EVs) built by local unions and phasing out imported EVs after five years. In a letter to U.S. senators on Friday, Deputy Prime Minister Chrystia said that would equate to a 34 percent tariff on electric vehicles assembled in Canada.

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Canada is concerned that the U.S. Manufacturers Tax Credit will undermine its own efforts to produce electric vehicles in Ontario – the industrial heartland of the country – and also undermine the integrated North American auto industry.

The proposed $ 12,500 electric vehicle tax credit would include $ 4,500 for electric vehicles built in the United States by unionized workers, starting in 2027. It is included in the Biden administration’s extensive legislation on climate and social spending currently under consideration by Congress.

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