The Canadian government is looking at all kinds of alternatives to avoid feeling the blow of the new electric vehicle tax benefits proposed in the United States.
Canadian Prime Minister Justin Trudeau confirmed that his administration has proposed to US lawmakers to integrate Canadian electric cars into the new credit scheme that is part of the Rebuild better From President Joe Biden.
There are many solutions that we suggested. “One of them is aligning our incentives here in Canada with those of the United States to ensure that there are no unfair advantages for either party,” Trudeau said at a news conference on Monday.
The Biden government’s tax credit proposal would increase credits for purchasing electric cars in the United States from $7,500 to $12,500 if they are assembled in unionized US factories and if their batteries meet the national minimum content.
Canada and Mexico, along with a number of countries, accused the proposal of protectionism and discrimination, and demanded that it be amended so as not to affect their exports and investments.
The proposal has already received the green light in the House of Representatives and is in the hands of SenateIt is expected to be analyzed and voted on before Christmas. Mexico and Canada launched a lobbying campaign in the US Congress to amend the credit plan, although there were no indications of a concrete response.
As the Senate decides how to proceed, Mexican and Canadian authorities have threatened to start disputes within the Mexico-US-Canada Treaty (T-MEC) and even respond with tariff strikes.
“You have to prepare for the worst.”
Canadian Foreign Trade Minister Mary Ng reiterated the urgency of the matter for the Canadian economy and her office’s plans to respond to the loan scheme, either by starting a dispute at the T-MEC or over interest rates.
“I hope we don’t have to do any of this. The important thing is Canada is preparing for the worst,” he commented in a TV interview.
Ng noted that Canada is preparing a “list”. Possible revenge It is not limited to tariffs only. Consider that benefits may be suspended for some products or services.
“We are also reviewing other procedures within T-MEC. Layoff [beneficios] In dairy products or in intellectual property.
He insisted that the loan plan proposal was “very serious and very important” for Canada.
The automotive sector is Canada’s second largest exporter. Its overseas sales were nearly $43 billion in 2020. More than 90 percent of what it exports goes to the United States.
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