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Mexico economic system minister threatens to impose tariffs over proposed U.S. EV tax credit score

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MEXICO CITY — A proposed U.S. electrical car tax credit score is “discriminatory” and Mexico is analyzing a variety of authorized actions in response which will embody tariffs, Mexican Economic system Minister Tatiana Clouthier stated on Thursday.

“Previously now we have imposed tariffs and we must do or suggest one thing essential and strategic for these merchandise, in these locations the place it hurts them … in order that the results will be felt,” Clouthier instructed a information convention.

Clouthier stated this was “not a fascinating” plan of action, however underscored that Mexico would do every part in its energy to safeguard its automotive trade, which immediately employs round a million individuals.

The U.S. Congress is contemplating a new $12,500 tax credit score that would come with $4,500 for union-made U.S. electrical autos. Solely U.S. constructed autos can be eligible for the $12,500 credit score after 2027, beneath a Home proposal.

Clouthier, who known as the measure “completely opposite to free commerce,” had beforehand rebuked the U.S. for pursuing what she described as protectionist insurance policies that have been liable to backfire and spur immigration.

She made an analogous argument on Thursday, saying “the impact on our auto exports would have a really massive influence on this sector that creates loads of jobs … and will even generate extra migratory pressures.”

In late October, Mexico, together with the European Union, Germany, Canada, Japan, France, South Korea, Italy and different international locations wrote U.S. lawmakers saying the proposed EV tax credit score violates worldwide commerce guidelines.

The proposal has been backed by U.S. President Joe Biden, the UAW and plenty of congressional Democrats, however opposed by main worldwide automakers, together with Toyota Motor Corp., Volkswagen Group, Daimler, Honda Motor Co., Hyundai Motor Co. and BMW.

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