On Friday (December 10, 2021), Canada dramatically tightened its grip on Washington in a debate over proposed U.S. credit for electric vehicles, threatening to impose tariffs on a range of American products until the issue is 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. "We are writing to register our objection in the strongest terms," said the letter, which emphasized that the government of Prime Minister Justin Trudeau did not want a confrontation. 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. In previous trade disputes between the two close neighbors and trading partners, both sides have slapped sanctions against a wide range of goods. Ottawa is preparing to Publish a list of U.S. products that may face Canadian tariffs, Freeland and Ng said, adding that Canada might also suspend dairy quotas for U.S. producers it agreed to under the USMCA, the letter said. Months of lobbying has done little to dissuade U.S. legislators, who are considering a new $12,500 tax credit that would include $4,500 for union-made U.S. electric vehicles. In the letter, Freeland and Ng said the proposal was equivalent to a 34% tariff on Canadian-assembled electric vehicles and represented a significant threat. Find more. |Source: Online/SZK
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