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EU Warns That Democrat's Proposed U.S. Electric-Vehicle Subsidies Will Inflame Trade Tensions

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Washington DC December 7, 2021; The AIADA reported that The European Union warned U.S. congressional leaders and members of President Joe Biden’s administration that the aggressive use of electric-vehicle credits in the pending Build Back Better Act could run afoul of international trade rules and create “friction” in the transatlantic relationship.

According to Bloomberg, the EU’s trade chief, Valdis Dombrovskis, sent a letter dated Dec. 3 to U.S. officials saying that the government subsidies would discriminate against European car manufacturers.

The American plan would offer an additional $4,500 in tax credits to consumers who buy cars made by U.S. manufacturers with union-represented workers.

Canada has spoken out against the subsidies and Mexico has threatened to retaliate.

The tax credits would “result in unjustified discrimination against EU car and car component manufacturers,” Dombrovskis said in the letter. “I very much hope that it will not lead to unnecessary friction or create new barriers in the transatlantic relationship.”