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EU Says US EV Credit May Violate WTO Regulations

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Aug. 12, 2022—The European Union on Thursday said it believes the new EV tax credit plan in the U.S. would break World Trade Organization rules by discriminating against European automakers.

According to a report from the Associated Press, the EU acknowledged that tax credits are "an important incentive to drive the demand for electric vehicles" via a statement from the European Commission, but it says measures that introduced need to be fair.

“The European Union is deeply concerned by this new, potential, trans-Atlantic trade barrier,” European Commission spokeswoman Miriam Garcia Ferrer said via the AP. “We think that it’s discriminatory, that it’s discriminating against foreign producers in relation to U.S. producers. Of course this would mean that it would be incompatible with the WTO."

The new plan touted has been touted by President Joe Biden as a way to encourage domestic production and give North American companies a leg up in the EV race. Production of most EV materials such as lithium is dominated mostly by China, and the leading cobalt producer in the world is the Democratic Republic of Congo.

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