Sunday 31 October 2021
Planned funding for e-cars
Car nations warn USA against protectionism
The USA is planning financial subsidies to promote the sale of e-cars. However, these should only apply to domestic models. 24 countries, including Germany, warn the US Congress to go ahead with the plans – they would violate trade rules.
Germany and 23 other countries with a strong auto industry have warned the US Congress in a joint letter against protectionism in electromobility. The letter sent to the heads of the US Congress by the Reuters news agency says that it is concerned about subsidy plans for the introduction of electric cars that have excluded foreign manufacturers. In addition to Germany, the signatories include France, Italy and other EU countries as well as Japan, Mexico, South Korea and Canada.
The background to this are plans in the US Congress to grant a new tax credit of $ 12,500. This should include $ 4,500 for US electric vehicles manufactured in plants where the UAW auto union is active. Also included would be $ 500 for US-made batteries. According to a House of Representatives proposal released earlier this week, only US-made vehicles would be eligible for the $ 12,500 tax credit after 2027.
The proposal is supported by US President Joe Biden, the UAW and many Democratic politicians in Congress. UAW President Ray Curry said the scheme will “create and maintain tens of thousands of jobs for UAW members” and “benefit auto workers.”
Detroit automakers benefit
The US electric car tax credit would cost $ 15.6 billion over ten years and disproportionately favor the three major Detroit automakers – General Motors, Ford, and Chrysler’s parent company Stellantis – who union their US-made vehicles assemble organized works.
Both foreign auto companies and the governments mentioned – all of them close partners of the US government – see this very differently. “This legislation, if implemented, would violate international trade rules, hard working
Disadvantage Americans who are employed by these automakers and undermine the efforts of these automakers to expand the US market for electric vehicles in order to meet the government’s climate goals, “said the October 29 letter, which was also sent by the German Ambassador to Washington, Emily Haber, The ambassadors of the auto countries point out that auto companies from their countries have already invested 98 billion dollars in the US and created 2.1 million jobs.
“In particular, the limitation of the entitlement to the credit to vehicles that were manufactured in the USA and have a local share contradicts the obligations that the USA has entered into under multilateral WTO agreements,” warned the ambassadors US Congress. “It puts America’s trading partners at a disadvantage and undermines the spirit of trade laws that are designed to ensure the free and fair movement of goods.”