Canada has threatened to impose a tax on some US products if the US implements President Joe Biden’s plan to subsidize the purchase of electric vehicles. The $ 1,750 billion social and environmental action plan, launched by Joe Biden and providing tax credit to encourage Americans to buy “US-made” electric vehicles, is considered “discriminatory” by Ottawa.
In a letter to several U.S. senators, Canadian Deputy Prime Minister Christiana Freeland and Trade Minister Mary Eng condemned “discrimination against Canada, Canadian workers and the auto industry” with “deep concern.” Canadian ministers write, “We do not want to take the path of conflict,” however, announcing the immediate release of “a list of US products subject to Canadian tariffs if the matter is not resolved satisfactorily.” The U.S. plan “equals 34% tax on electric vehicles assembled in Canada,” Ottawa said.
However Canada, the United States and Mexico have recently made a new free trade agreement, especially in the automotive sector. Christiaan Freeland and Mary NG warn that “the retaliatory measures we propose will extend to sectors other than the automotive sector” and that Canada will make it clear that “any American companies or workers will be affected”. The ministers’ letter specifically threatens to suspend the “tariff quota for US dairy products” provided for in the agreement between the three countries. “Participating in Canada’s joint electric vehicle production is essential to protecting our integrated businesses, maintaining good and well-paying jobs for workers on both sides of the border, and achieving our common environmental goals and ensuring a strong bilateral relationship between our two countries. , Ministers write again.
The North American automotive industry is highly integrated. During the production of automobiles, car parts and accessories were assembled in one of the allied countries before repeatedly crossing the Mexican, American and Canadian borders. But the Biden administration wants to promote union work in the United States and GDP. Among the major social and environmental action plans currently being discussed in the U.S. Congress is the proposed tax credit to encourage Americans to purchase electric vehicles made in the United States.