Joe Biden will meet the leaders of Mexico and Canada this week as his plans to encourage Americans to buy electric cars made in the US have sparked furious opposition from two of America’s biggest trading partners.
The so-called three amigos summit, to be held at the White House, will take place for the first time since 2016, and comes as senior officials in Mexico City and Ottawa have complained that Biden’s plans to kickstart EV manufacturing in the US break international trade rules.
The opposition of some of the US’s closest allies to a flagship climate policy poses a political and diplomatic dilemma for Biden. The president has pledged to both lower tensions with trading partners following the tumultuous tenure of Donald Trump, and to use industrial policy to boost green industries like electric car manufacturing.
Although not yet passed into law, Biden’s broader $1.75tn legislative package contains proposals to offer a tax credit of $7,500 for electric vehicles made only in the US from 2026. Another $4,500 of tax credits are available for purchasing electric cars made with union labor.
On Friday, Mélanie Joly, Canada’s foreign minister, said she had raised the issue in a meeting with Antony Blinken, US secretary of state.
Mary Ng, Canada’s trade minister, has previously written to the Democratic and Republican leaders and to Katherine Tai, US trade representative, and Gina Raimondo, US commerce secretary, to convey Ottawa’s “very serious concerns” about the EV credits.
Ng’s office said that Washington’s proposed measures were “inconsistent” both with its obligations under USMCA, the updated North American trade deal struck between the three countries under Donald Trump and with the rules of the World Trade Organization.
Tatiana Clouthier, Mexico’s economy minister, has sent her own letters to US legislators to ask that the proposals be altered to be brought in line with
USMCA.
“It’s contradictory,” Clouthier said. “They would set off more [migration] with this kind of measure.”