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.”
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.
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.
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 – which assemble their U.S.-made vehicles in union-represented plants.
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.”
Autoworkers at the foreign automakers in the countries that wrote are nearly all unionized but not in the United States.