Opponents say the US plan for a new US-built electric vehicle tax credit of $ 12,500 is inconsistent with WTO commitments.
The European Union, Germany, Canada, Japan, Mexico, France, South Korea, Italy and other countries have written to US lawmakers to say that a US tax credit for electric vehicles violates international trade rules, according to a joint letter.
On Friday evening, a group of 25 ambassadors in Washington wrote to U.S. lawmakers and the Biden administration to say that “limiting credit eligibility to vehicles based on their U.S. national assembly and local content is inconsistent with the commitments Americans taken within the framework of the multilateral agreements of the WTO “.
The US Congress is considering a new tax credit of $ 12,500 that would include $ 4,500 for American electric vehicles made by unions and $ 500 for batteries made in the United States. Only vehicles built in the United States would be eligible for the $ 12,500 credit after 2027, under a House proposal released last week.
Canada and Mexico issued separate statements last week opposing the plan. The US State Department declined to comment on Saturday and the White House did not immediately respond to a request for comment.
The proposal is supported by President Joe Biden, the United Auto Workers (UAW) and many Congressional Democrats, but opposed by major international auto companies including Toyota Motor Corp, Volkswagen AG, Daimler AG, Honda Motor Co, Hyundai Motor Co and BMW AG. .
A dozen foreign automakers wrote to the two California senators on Friday urging them to abandon the plan they say discriminates against the state.
UAW President Ray Curry said the provision “would create and preserve tens of thousands of jobs for UAW members” and “would be a victory for workers in the auto manufacturing industry.”
Electric vehicle tax credits would cost $ 15.6 billion over 10 years and disproportionately benefit Detroit’s three big automakers – General Motors, Ford Motor and Stellantis NV, the parent company of Chrysler – which assemble their vehicles manufactured in the United States at factories represented by unions.
Ambassadors who also include Poland, Sweden, Spain, Austria, the Netherlands, Belgium, Cyprus, Ireland, Malta, Finland, Romania and Greece said the legislation would hurt international car manufacturers.
They said it “would violate international trade rules, put American workers who work hard for these automakers at a disadvantage, and undermine the efforts of those automakers to expand the U.S. electric vehicle market to meet the climate goals of the United States. administration (Biden) “.
The letter added that it “puts US trading partners at a disadvantage.”
The auto workers of foreign automakers in the countries that wrote the letter are almost all unionized, but not in the United States.
“Our governments support the right of workers to organize. It is a fundamental right and should not be used as part of tax incentives, sidelining opportunities for nearly half of America’s auto workers, ”they wrote.