Mexico expresses concern to US over incentives for electric cars

The government of Mexico expressed “strong concern” to US congressmen about its proposal to offer new tax incentives to electric vehicles manufactured in that country after 2026, considering it “contrary” to what was agreed in the TMEC trade agreement.

In two letters published by the Mexican Ministry of Economy on Friday, dated September 20, the Government also criticized that the motion approved by a committee of the Lower House that month provides for greater tax incentives when the vehicle has at least 50% content. and American batteries.

“The above provisions are contrary to the regional content value rules agreed in the TMEC, so I respectfully request that they consider including incentives for all North American regional content and assembly in a manner compatible with the Treaty,” says the letter signed by the incumbent Tatiana Clouthier.

The official warrant comes amid growing tensions over the stricter interpretation that, according to Mexico, the US authorities make in the application of the rules of origin to calculate the regional content value of automobiles within the framework of the agreement.

Canada also said last week that US proposals to create new tax credits for US-made electric cars could hurt the auto industry and violate trade agreements.

The letter signed by Clouthier notes that “the existence of new local content requirements in legislative initiatives of the US Congress would undermine the positive development of a strengthened North American alliance.”

The Ways and Means committee of the U.S. House of Representatives passed legislation in September to increase credits for electric vehicles to $ 12,500 per unit starting in 2027, including $ 4,500 for domestically manufactured vehicles and $ 500 for batteries. Americans.

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