US, EU 'working through' differences on electric vehicle tax credits

By Michael Hernandez

WASHINGTON (AA) - The US and EU are moving forward with efforts to resolve an ongoing trade dispute over US electrical vehicle tax credits that have irked Europe, which claims they are protectionist, said the nation’s top diplomat on Monday.

Speaking at strategic trade discussion held outside of the nation's capital in Maryland, Secretary of State Antony Blinken said that the US has "heard concerns clearly from our European friends about certain specific aspects of" US President Joe Biden's signature law, adding that Biden had "reinforced our commitment to address the concerns."

"We're doing that efficiently. We're doing that quickly, and today, we advanced that discussion. We talked today in the context of the TTC (transatlantic Trade and Technology Council) about the electric vehicle tax credit, about the commercial vehicle tax credit. We talked about critical minerals and the supply chain," Blinken told reporters in College Park, Maryland following the talks.

"Coming out of these conversations, and feeding in to the work of the task force, I'm convinced that we are continuing to give momentum to that conversation, and to working through the differences as President Biden said we would do," he added.

Biden's Inflation Reduction Act includes a myriad of provisions, not all of them climate related. But it is the act's sweeping electrical vehicle tax credits that have become a sticking point in bilateral relations between the US and EU. A bilateral task force has been set up to address Europe's concerns.

The $7,500 credits are reserved for new electric vehicles manufactured in North America, or any nation with whom the US has a free trade agreement. The US has 20 free trade agreements with other countries, according to the Office of the US Trade Representative. But none are in Europe, nor is there one with the EU.

EU Trade Commissioner Valdis Dombrovskis said Monday's discussion "helped us to move things forward as regards the US Inflation Reduction Act."

"We are leaving this meeting slightly more optimistic than we were entering this meeting, but we also know that the Inflation Reduction Act, a number of provisions, enters into force Jan. 1 next year so we still have lots of work to do," he said.