All the anti-US EU turmoil over the new electric car incentives approved by the US Senate
For the European Commission, the $ 400 billion package that also includes the controversial incentives for the electric car violates the rules of the WTO, the World Trade Organization. Rain of criticism also 'at home' from the big names in the sector
Even with many difficulties, the US Senate approved, thanks to the decisive vote of Vice President Kamala Harris , the Inflation Reduction Act , a substantial aid package to support the American economy. Among the folds, this new body of legislation also contains several proposals initially envisaged in the Build Back Better, the maxi green plan wanted and defended by President Joe Biden who, however, immediately ran aground in the halls of Congress, failing to gather the necessary majority around him. (the vetoes of the Republicans had been joined by that of the Democrat Joe Manchin ).
WHAT IS INFLATION REDUCTION ACT
The new $ 400 billion bill now expected in the House – where Democrats have a much larger majority and therefore no surprises are expected about rapid approval – intervenes in various fields, from climate to energy and was created to cope. to two looming issues: protecting the US consumer from rising inflation and reducing US industry's dependence on China.
Inside, the White House wanted to insert the incentives that animated another rather substantial package, the Build Back Better, a plan of 3,500 billion (later reduced to 2,200, during the negotiations) criticized by the Republicans and also by the Democratic senator (of the area centrist) Joe Manchin who, with his opposition, forced the entire measure to return to the pits.
THE CRITICS MOVED TO THE GREEN PLAN OF BIDEN
Manchin in fact, needle of the balance in the Upper House (his ok would have allowed the Democrats to reach 50 consensus, the same at the disposal of the Republicans and then the Kamala Harris vote would have been decisive), after months of courtship on both sides, last December he had finally made a decision, siding against the ambitious green plan wanted by the Biden administration to make the American auto industry the first in the field of EV cars, even with substantial incentives to rain for those who had bought an electric.
“I cannot vote for this law. I can not make it. I tried everything that was humanly possible, but I can't do it », Manchin told the media, breaking the delay. The senator, a representative of West Virginia, a rather poor state whose economy until a few years ago was mainly based on coal mines that were gradually being phased out also due to the new climate regulations, had defended his decision by arguing that the Build Back Better would have created a huge chasm in public accounts in an economic period characterized by too many uncertainties. For the centrist it would have been better to allocate that treasure to other forms of support for the American people.
THE INCENTIVES FOR ELECTRIC CARS SURVIVE IN THE NEW PACKAGE
Beached the Build Back Better, several measures have been carried over to the anti-inflation package. The Inflation Reduction Act, for example, intervenes on the tax credit of 7,500 dollars reserved so far for industries as long as they do not exceed the threshold of 200 thousand electricity sold (this threshold, for example, has already been exceeded by the main brands: Tesla, GM and Toyota) eliminating the constraint on volumes as early as January 2023. On the other hand, however, it adds limits of a "protectionist" nature: to access the tax benefit, in fact, from now on the cars must be assembled in North America and the materials , with particular reference to the "critical minerals" of batteries, must originate in the United States or in a country with a free trade agreement with Washington.
The intent of these new limitations is clear: to facilitate the industries that produce in the States and that are investing to start a supply chain of raw materials – in particular those necessary for EV car batteries and especially microchips – at zero kilometer, which emancipate the USA from the Chinese market, in a period in which relations between Washington and Beijing are certainly not the best and the White House therefore expects sudden drops in supplies coming from the East.
Furthermore, to silence the criticisms that had mainly concerned the Build Back Better also moved by observers close to the Republicans, according to which the incentives would be helping above all the economically strong segment of the population interested in the purchase of luxury EV cars, now limits are foreseen. of application also with reference to the list prices of electric, which cannot exceed $ 55,000 for cars and $ 80,000 for SUVs and pick-ups, while the annual income of buyers must be below $ 150,000. .
WHO DON'T LIKE THE CONGRESS ELECTRIC CAR INCENTIVES
Tesla's Elon Musk has repeatedly attacked the new measures, and has never spared harsh criticism of the Biden administration. The US manufacturer, although it is focusing heavily on Texas for the production of batteries with “zero km” raw materials, has in fact its own industrial engine in Shanghai. Toyota, which in the States has one of the main reference markets, has also climbed the barricades.
More generally, the entire Alliance for Automotive Innovation grumbled that the electric car incentives, as redesigned in Congress, will exclude most vehicles currently produced in the US, even jeopardizing the goal 40-50% of sales with electric vehicles by 2030 ".
THE CRITICISM OF THE EU
And then there is the European Union, which has remained (like Canada, which at the automotive level has several very strong partnerships with US companies) quite annoyed by the protectionist limits envisaged in the package given that they demonstrate little solidarity of the States towards of the Old Continent, precisely in a historical moment in which the world seems to return to divide itself into two large opposing blocks, East and West.
Commission spokeswoman Miriam García Ferrer said, without too many words: «The European Union is seriously concerned by this new, potential, transatlantic trade barrier currently under discussion in the United States. We think that the bill is discriminatory towards foreign producers compared to US ones ». According to the European Commission, the spokeswoman added, the law violates the trade rules of the WTO, the World Trade Organization. For this reason Brussels "urges the United States to remove discriminatory elements and to ensure that it respects the rules of the WTO".
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/smartcity/tutti-i-subbugli-ue-anti-usa-sui-nuovi-incentivi-per-lauto-elettrica-approvati-dal-senato-americano/ on Wed, 17 Aug 2022 06:07:12 +0000.