Angry Canada threatens to impose tariffs on U.S. goods over EV tax credit plan – Reuters
A U.S. and a Canadian flag flutter at the Canada-United States border crossing at the Thousand Islands Bridge in Lansdowne, Ontario, Canada September 28, 2020. REUTERS/Lars HagberG/File Photo
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OTTAWA, Dec 10 (Reuters) – Canada dramatically hardened its tone with Washington in a dispute over proposed U.S. credits for electric vehicles on Friday, threatening to slap tariffs on a range of American goods unless the matter was resolved.
In a letter to senior members of the U.S. Senate, Finance Minister Chrystia Freeland and Trade Minister Mary Ng also said Canada was ready to launch a dispute settlement process under the U.S.-Mexico-Canada (USMCA) trade deal.
Canada fears the tax credit for American manufacturers will undermine its own efforts to produce electric vehicles in Ontario – the country’s industrial heartland – and also undermine the integrated North American auto industry.
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“We are writing to register our objection in the strongest terms,” said the letter.
If the matter was not resolved “Canada will have no choice but to forcefully respond by … applying tariffs on American exports in a manner that will impact American workers in the auto sector and several other sectors of the U.S. economy,” the two ministers continued.
The White House says President Joe Biden considers the tax credits a personal priority and that the administration does not view them as a violation of the USMCA. Officials have said they hope to work to resolve the dispute with both Canada and Mexico, which also opposes the credit proposal.
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Reporting by David Ljunggren in Ottawa
Editing by Matthew Lewis
Our Standards: The Thomson Reuters Trust Principles.
