A day before the House is expected to pass a bill, the Inflation Reduction Act, that includes electric vehicle tax credits with strings attached for sourcing and assembly, activists and analysts are reacting to European Union's argument that the EV tax credit violates World Trade Organization rules.
The climate, healthcare and tax bill called the Inflation Reduction Act did not change the terms of an electric vehicle tax credit, even after fierce lobbying by automakers (see 2208040045).
Learn from the lessons of the failed Trans-Pacific Partnership, warned trade skeptics Rep. Rosa DeLauro, D-Conn., and Sen. Elizabeth Warren, D-Mass, in a letter they and other signatories released publicly Aug. 2. They said binding commitments in either the Indo-Pacific Economic Framework, or reached with Latin American partners, are not legal without congressional say-so. "The administration’s many public declarations about the proposed IPEF process seem to indicate that it plans to negotiate a binding agreement while circumventing congressional input, authority, and approval," they wrote.
The electric vehicle tax credit provisions in the Inflation Reduction Act rest not just on North American vehicle assembly -- but also on critical mineral supply chains that don't exist yet and high North American battery content. Because the provisions are aimed at incentivizing new plants, automakers are lobbying for the phase-in to be more gradual.
Senate Finance Committee members praised the experience of Doug McKalip, the administration's nominee to be chief agricultural negotiator in the Office of the U.S. Trade Representative. McKalip, a senior adviser on international trade policy and other matters to the agriculture secretary, is a career staffer at USDA.
The House of Representatives passed a bill that offers tax credits and grants to semiconductor manufacturers and increases government spending on science research, on a 243-187 vote on July 28. Twenty-four Republicans voted for the bill. Rep. Sara Jacobs, D-Calif., voted present, as her family founded major chipmaker Qualcomm, which will benefit from the bill.
Trade groups that represent semiconductor manufacturers and customers lauded the Senate's passage of incentives for domestic manufacturing, while unions and a union-funded advocacy group both praised the bill and said trade provisions that were not included still need to pass.
Sen. Chuck Grassley, R-Iowa, said he decided to vote against the slimmed-down China package, the U.S.Innovation and Competition Act, because it no longer includes the IMPORT Act, which would have expanded CBP authority to share information with rights holders on suspected counterfeit merchandise.
Sens. Gary Peters, D-Mich., and John Cornyn, R-Texas, introduced a bill July 20 that would require 90% or more of commercial vehicles to go through non-intrusive inspection at ports of entry by the end of fiscal year 2024.
Although climate advocate Sen. Sheldon Whitehouse, D-R.I., has hopes of introducing a bipartisan carbon border adjustment tax, he said it may take American exports being hit with carbon border tariffs in Europe to get Congress to move.