Remember that electric-vehicle spat with the U.S.? The Europeans are still steaming
CBC
For Canada, it's the old irritant that cooled off months ago. For Europe, it's still burning hot and causing sweats in its relations with the U.S.
Remember that electric-vehicle dispute with the U.S.?
France sure does. As does the rest of Europe, and Asia. President Emmanuel Macron's state visit to Washington this week emphasized this big-money brouhaha remains very much alive.
At issue is the unprecedented sums Washington has pumped into clean-energy production under the new Inflation Reduction Act, lavishing hundreds of billions to turbocharge the transition to zero-emissions technology.
Canada and Mexico escaped one of its most worrisome provisions: A stipulation that only vehicles assembled in the U.S. qualified for certain tax credits.
It caused cross-border palpitations for a few months. Policy-makers to the U.S.'s north and south contemplated the potential wipeout of next-generation manufacturing jobs.
We caught a break in the final version of the bill. It granted preferential treatment to all North American vehicles.
That fortuitous news came amid a hot streak for Canadian auto-manufacturing, with billions in new auto-plant investments, and Canada zooming to No. 2 in Bloomberg's worldwide rankings for electric battery supply chains.
"The last 18 months have been unprecedented. There hasn't been another stretch like that, even a 10-year stretch like that, in the history of the Canadian auto sector," said Flavio Volpe, head of Canada's auto-parts lobby.
"A year ago we were faced with the prospect of exclusion from the U.S. market – from the market that pays our bills.… It's a real table flip."
Canada and Mexico, he said, are the only two jurisdictions inside the U.S. tent.
And countries outside the tent, like France, are steaming.
That's because only North American-made cars are eligible for the full $7,500 tax credit; U.S. consumers get a smaller refund for buying cars from other countries.
WATCH | Canada relieved by changes to U.S. electric vehicle tax credits:
