International opposition mounts over proposed U.S. EV tax credit (updated)
30/10/2021 19:45
(Adds more details)
By David Shepardson
WASHINGTON, Oct 30 (Reuters) - The European Union, Germany,
Canada, Japan, Mexico, France, South Korea, Italy and other
countries wrote U.S. lawmakers saying a proposed U.S. electric
vehicle tax credit violates international trade rules, according
to a joint letter made public Saturday.
A group of 25 ambassadors to Washington wrote U.S. lawmakers
and the Biden administration late Friday saying "limiting
eligibility for the credit to vehicles based on their U.S.
domestic assembly and local content is inconsistent with U.S.
commitments made under WTO multilateral agreements."
The U.S. Congress is considering a new $12,500 tax credit
that would include $4,500 for union-made U.S. electric vehicles
and $500 for U.S.-made batteries. Only U.S. built vehicles would
be eligible for the $12,500 credit after 2027, under a House
proposal released this week.
Canada and Mexico have issued separate statements in the
last week opposing the plan. The U.S. State Department declined
to comment Saturday and the White House did not immediately
respond to a request for comment.
The proposal is backed by President Joe Biden, the United
Auto Workers (UAW) union and many congressional Democrats, but
opposed by major international automakers, including Toyota
Motor Corp 7203.T , Volkswagen AG VOWG_p.DE , Daimler AG,
Honda Motor Co, Hyundai Motor Co 005380.KS and BMW AG
BMWG.DE .
A dozen foreign automakers wrote California's two senators
on Friday urging them to abandon the plan that they said would
discriminate against the state. urn:newsml:reuters.com:*:nL1N2RP3D7
UAW President Ray Curry said the provision will "create and
preserve tens of thousands of UAW members' jobs" and "would be a
win for auto manufacturing workers."
The EV tax credits would cost $15.6 billion over 10 years
and disproportionately benefit Detroit's Big Three automakers -
General Motors GM.N , Ford Motor F.N and Chrysler-parent
Stellantis NV FCHA.MI - which assemble their U.S.-made
vehicles in union-represented plants.
The ambassadors that also include Poland, Sweden, Spain,
Austria, Netherlands, Belgium, Cyprus, Ireland, Malta, Finland,
Romania and Greece said the legislation would harm international
automakers.
They said it "would violate international trade rules,
disadvantage hard-working Americans employed by these
automakers, and undermine the efforts of these automakers to
expand the U.S. EV consumer market to achieve the (Biden)
administration’s climate goals."
The letter added it "puts U.S. trading partners at a
disadvantage."
Autoworkers at the foreign automakers in the countries that
wrote are nearly all unionized but not in the United States.
"Our governments support workers’ right to organize. It is a
fundamental right and should not be used in the framework of tax
incentives, setting aside the opportunities for nearly half of
America autoworkers," they wrote.
(Reporting by David Shepardson; editing by Diane Craft)
((David.Shepardson@thomsonreuters.com; 2028988324;))