Mexico may impose tariffs on proposed US electric vehicle tax credit

FILE PHOTO: Mexican Economy Minister Tatiana Clouthier gestures during interview with Reuters in Mexico City
FILE PHOTO: Mexican Economy Minister Tatiana Clouthier gestures during an interview with Reuters in Mexico City, Mexico, on January 11, 2021. REUTERS/Dave Graham

December 2, 2021

By Anthony Esposito

MEXICO CITY (Reuters) – A proposed US electric vehicle tax credit is “discriminatory” and Mexico is analyzing a range of legal actions in response that could include tariffs, minister Mexican economist Tatiana Clouthier said on Thursday.

“In the past, we have imposed tariffs and we would have to do or suggest something very important and strategic for those products, where it hurts them… to can feel the consequences,” Clouthier told a news conference.

Clouthier said it was not an “unwanted” move, but stressed that Mexico would do everything in its power to protect its auto industry, which directly employs about a million people. .

The US Congress is considering a new $12,500 tax credit that will cover $4,500 for union-made electric vehicles in the US. Only US-built cars will be eligible for the $12,500 credit after 2027, according to the House proposal.

Clouthier, who called the measure “the complete opposite of free trade,” had previously rebuked the United States for pursuing what she described as potentially counterproductive and promoting protectionist policies. immigration.

She made a similar argument on Thursday, saying that “the impact on our auto exports will have a huge impact on this job-creating sector… and possibly even more. migration pressure”.

At the end of October, Mexico, along with the European Union, Germany, Canada, Japan, France, South Korea, Italy and other countries wrote US lawmakers saying that the proposed electric vehicle tax credit violate international trade rules.

The proposal has been supported by US President Joe Biden, the United Auto Workers (UAW) union and many Democratic members of Congress, but is opposed by major international automakers, including Toyota Motor Corp, Volkswagen AG, Daimler AG, Honda Motor Co, Hyundai Motor Co and BMW AG.

(Reporting by Anthony Esposito; Editing by Drazen Jorgic, Cynthia Osterman, Angus MacSwan and Richard Chang) Mexico may impose tariffs on proposed US electric vehicle tax credit

Bobby Allyn

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