Canada threatens U.S. with tariffs, partial suspension of USMCA over electric vehicle tax credit

Deputy High Minister Chrystia Freeland has written to top U.S. senators threatening to droop parts of the USMCA business settlement and impose price lists on American items unless U.S. officials again clear of a proposed tax credit for American-built electrical cars.

“we are deeply concerned that certain provisions of the electrical car tax credits as proposed within the Build Back Better Act violate the U.s.a.’ tasks beneath the U.s.a.-Mexico-Canada Agreement,” Freeland and World Industry Minister Mary Ng say within the letter.

“The proposal is comparable to a 34 per cent tariff on Canadian-assembled electric automobiles,” the letter says. “The proposal is a vital threat to the Canadian automobile trade and is a de facto abrogation of the USMCA.”

Congress is presenting sizable tax credits worth up to $12,500 US to buyers of latest electric automobiles — as long as those automobiles are manufactured by union workers in the U.S.

Experts agree the tax degree might deal an incredible blow to the Canadian automobile sector, which is trying to attract new investment as the trade transitions clear of inner combustion engines.

More to come …

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