New electric vehicle tax credits raise talk of trade war

By FATIMA HUSSEIN
Associated Press

WASHINGTON (AP) — A new tax credit for U.S. buyers of qualifying electric vehicles made in North America in the Inflation Reduction Act has prompted unfair trade practice allegations overseas. The climate change and health care bill was signed into law last week. It includes a tax credit of up to $7,500 that could be used to defray the cost of purchasing an electric vehicle. The vehicle must contain a battery built in North America with 40% of the metals mined or recycled on the continent. The European Commission says the new tax credit discriminates against foreign producers and calls the credits a “new, potential, trans-Atlantic trade barrier.” And the rules on the battery tighten over time, with only a few American manufacturers able to produce vehicles that would qualify.