What is EV tax credit and why is Canada threatening the U.S. with tariffs?
Global News
A letter sent Friday to members of the U.S. Senate leadership is the latest move in a months-long spat between Canada and the U.S. over the president's proposed EV tax credit.
Canada, in its most aggressive display so far against a proposed United States electric vehicle tax credit plan, has threatened to impose new tariffs on its biggest trading partner.
The threats, sent in a stern letter Friday to several members of the U.S. Senate leadership, included promises to slap taxes on a swathe of American products should President Joe Biden’s proposed plan to encourage the development and sale of U.S.-made electric vehicles become law.
The development is the latest in a months-long spat between Canadian and U.S. leaders over a provision in the president’s Build Back Better Act, which — if passed — would allow Americans to claim incentives worth thousands of dollars on some electric vehicles.
With the plan threatening to severely impact Canada’s automotive sector, valued at tens of billions of dollars in exports alone to the U.S., here’s everything you need to know about the dispute so far.
Biden’s Build Back Better plan — a major part of the then-presidential candidate’s platform in the 2020 election — includes a very enticing incentive worth US$12,500 for Americans looking to buy electric vehicles made and built on U.S. soil.
Biden’s administration promoted the tax credit plan as a means to increase middle-class American families’ access to electric vehicles that would also allow the U.S. to create millions of jobs and hit its climate change goals.
The bill has already been passed in the U.S. House of Representatives and now waits for approval in the U.S. Senate — which is divided by 48 Democrats, 50 Republicans and two independents that are closely aligned with the Democrats.
U.S. Vice President Kamala Harris, a Democrat, holds a deciding tie-breaking vote within the Senate, however, presenting a chance for the bill’s passing should all Democrats, independents and the vice-president vote in support.