The President’s Administration Joe Biden, defied the series of ultimatums that Mexico, Canada and the European Union have sent, in which they warn that the United States would violate the rules of the World Trade Organization (WTO) and other trade agreements if auto subsidies are approved in the process of being voted on in the US Congress.
“Our Law Build Back Better it will reduce the sticker price of new electric vehicles manufactured in the United States by unionized workers by up to 12,500 (dollars), ”said the vice president. Kamala Harris Monday.
Its promotion to the initiative comes a few days after the expected Senate vote on that initiative will occur and after warnings from its main automotive trading partners that they will respond with retaliation if those subsidies are implemented.
“We are deeply concerned that certain provisions of the EV tax credits proposed in the Build Back Better Act violate the United States’ obligations under T-MECThey said Chrystia Freeland, Deputy Prime Minister and Minister of Finance, and Mary Ng, Minister of International Trade, Export Promotion, Small Business and Economic Development of Canada.
The grant ranges from $ 7,500 to $ 12,500. and it would be higher if the assembly conditions are met in that country, with a certain percentage of American components and unionized labor.
“The proposal equates to a 34% tariff on electric vehicles assembled in Canada. The proposal is a significant threat to the Canadian automotive industry and is a de facto repeal of the T-MEC ”, asserted Freeland and Ng, in a letter addressed to the United States Congress.
The most recent draft text of the Senate Finance Committee, released this Saturday, maintains the subsidy of up to $ 12,500 for the purchase of electric vehicles.
“To defend our auto industry and regional commitment we would retaliate commercially; We would do that because it is not worth that we are playing as partners when it suits me and when not, I apply you through the dark way, and I say dark because it does not show, because we are talking about that this measure would come into force in 2027 “, expressed Tatiana Clothier, Secretary of the Economy, at a press conference in early December.
The new initiative runs in the opposite direction to President Biden’s statements that the United States would rely more on its major trading partners to deal with growing competition from China.
“This legislation, if implemented, would violate international trade rules, harm American workers employed by these automakers, and undermine the efforts of these automakers to expand the United States’ consumer electric vehicle market to achieve the same. Climate objectives of the Administration ”, questioned 25 ambassadors of the European Union in another letter addressed to the US Congress.
Internally, the legislative initiative related to subsidies for the purchase of electric vehicles has divided the governors of the United States, with 11 of them, practically all from the south of the country and with an outstanding production, opposing it.
“We cannot support any proposal that creates a discriminatory environment in our states by punishing auto workers and auto companies because their plant workers chose not to unionize,” the governors said in a letter sent to the US Congress.
roberto.morales@eleconomista.
Reference-www.eleconomista.com.mx