Canadian Prime Minister Justin Trudeau said on Monday that he had proposed to the United States to adjust the tariffs granted to the electric car industry to avoid a trade dispute with Washington.
His statement comes after Washington threatened to suspend new tariffs on U.S. products and parts of the US Free Trade Agreement if it offered tax breaks for electric vehicles manufactured in the United States with union workers.
“Canada and the United States have been producing cars for over 50 years. Our supply chains are deeply integrated, ”Trudeau told a news conference.
“That’s why we work so hard with the United States. This tax deduction for their electric vehicle sector is obviously not good for Canada, but not good for the United States,” he said.
Trudeau said Washington had already proposed “multiple solutions” that would “align incentives to ensure that there are no unfair advantages for both Canada and the United States.”
The proposed U.S. grant is included in President Joe Biden’s $ 1.75 trillion budget, which is awaiting congressional approval.
The plan proposes to increase the production of electric vehicles in the United States by offering higher tax breaks for vehicles manufactured in the United States by companies with unions.
In a letter to U.S. senators on Friday, Canadian Deputy Prime Minister Christiaan Freeland said the tax breach would impose a 34% tax on electric vehicles manufactured in Canada.
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