Canada says proposed U.S. EV tax credit could harm sector, mulls possible challenge – by David Shepardson and David Ljunggren (Reuters/ – October 22, 2021)

WASHINGTON/OTTAWA (Reuters) -Canada said on Friday that U.S. proposals to create new electric vehicle tax credits for American-built vehicles could harm the North American auto industry and fall foul of trade agreements, according to a letter seen by Reuters.

Separately, a Canadian government source expressed confidence a solution would eventually be reached but said Ottawa might have to launch a challenge through the United States-Mexico-Canada (USMCA) trade deal.

In the letter dated Oct. 22, Canadian Trade Minister Mary Ng told U.S. lawmakers and the Biden administration that the credits, if approved, “would have a major adverse impact on the future of EV and automotive production in Canada.”

She said this would raise the risk of severe economic harm and tens of thousands of job losses in one of Canada’s largest manufacturing sectors, adding that U.S. companies and workers would not be immune from the fallout. The auto industry in both nations is highly integrated.

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