Mexico Wants To Sue America Over Electric Vehicles

Government / Comments

It might actually have a case.

The Biden administration's Build Back Better Act includes a provision aimed specifically at some electric vehicles buyers. If that new EV is built in America by union workers, then customers can receive subsidies of up to $12,500. Automakers like Toyota, Hyundai, and Honda, all of whom have major manufacturing operations in the US, are not happy about the union-made provision because their factory workers are not unionized. And, as it turns out, they're not the only ones taking issue with the bill.

The Associated Press reports Mexico is now threatening legal action because the bill, in its view, violates the non-discrimination clauses of the US-Mexico-Canada free trade pact.

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The country's secretary of the economy, Tatiana Clouthier, claims the measure discriminates against exports of Mexican-built EVs and favors US manufacturers. That's supposedly not allowed in the USMCA Pact. "We would apply trade reprisals," Clouthier said, apparently referring to possible tariffs. "This bill is not consistent with the U.S. obligations under the TMC and the rules of World Trade Organization."

It's totally understandable that Mexico, as any country should, is looking out for its domestic manufacturing operations, which have been hit extremely hard by the pandemic and the semiconductor chip shortage. Popular vehicles, such as the new Ford Bronco Sport, are built there.

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Clouthier further pointed out that not only could the bill cost Mexican auto manufacturing jobs, but may even "generate additional pressures for migration." Whatever happens next is going to be soon because the bill is expected to come up for a vote in the Senate before Christmas.

Mexico and the US are currently involved in a separate dispute regarding the former's policies to limit competition in the electrical power sector. The country's president, Andres Manuel Lopez Obrador, wants to enact constitutional changes that would restrict market share for private power generators in favor of the country's state-owned utility company. Those private power producers are American companies, specifically in Texas.

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Source Credits: Associated Press

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