'Damaging' EV tax credit has Canada, Mexico seeking united front

Mexico’s ambassador to Canada said his government and that of Justin Trudeau are of one mind about how to counter the Biden administration’s Buy American tax credits for electric vehicles as the proposal heads for a vote in the U.S. Senate.

Mexico’s ambassador to Canada said his government and that of Justin Trudeau are of one mind about how to counter the Biden administration’s Buy American tax credits for electric vehicles as the proposal heads for a vote in the U.S. Senate.

While Mexico’s economy minister has explicitly threatened commercial retaliation against other U.S. goods if the measure is passed, Canada has taken a more cautious public line. But the top Mexican diplomat in Ottawa said in an interview the two countries are united.

“Not only are we on the same page, but we see the next steps in a very similar way,” Juan Jose Gomez Camacho said.

At issue is a provision in the US$1.75 trillion Build Back Better Act that offers an additional US$4,500 in tax credits to buyers of electric vehicles made by unionized U.S. workers.

Gomez Camacho argued that runs counter to the trilateral trade pact between the three countries, the U.S.-Mexico-Canada Agreement, and risks demolishing the continental integration he said is crucial to making cars produced in North America competitive around the world.

“It’s self-defeating for the U.S. and for the region,” the ambassador said. Unraveling the integrated auto market now would be “very damaging, and it can’t bring about positive results.”