The Comprehensive and Progressive Agreement for Trans-Pacific Partnership, which has 11 member countries since the U.S. backed out in 2016, has attracted four applications this year, from the United Kingdom, Taiwan, China and, most recently, South Korea. The U.S., which took a leading role in negotiating the high-standard free trade agreement, is unlikely to ask to come back in the next two years, panelists on a Hudson Institute discussion agreed.
The ranking member of the Senate Finance Committee said Congress should take into consideration how an electric vehicle subsidy limited to American-assembled vehicles affects the trading relationships in North America, but Sen. Mike Crapo, R-Idaho, acknowledged that Republicans' views on the Build Back Better bill are irrelevant, since none of them plan to vote for it. The House version of Build Back Better gives a richer purchase incentive for U.S.-made cars from union plants, and for U.S.-origin batteries, and then limits the tax credit to U.S.-assembled cars starting in 2027.
The Customs Rulings Online Search System (CROSS) was updated Dec. 10. The following headquarters rulings were modified recently, according to CBP:
Despite repeated lobbying and threats of tariffs on U.S. exports from Canada and Mexico, the Senate Finance Committee is proposing that a purchase credit for electric vehicles remain more generous for union-made, U.S.-assembled cars and trucks through 2026, and be reserved only for U.S.-made vehicles starting in 2027.
CBP issued the following releases on commercial trade and related matters:
Canada's finance and trade ministers said that an electric vehicle purchase tax credit that excludes Canadian batteries or Canadian-assembled cars abrogates the USMCA, and they asked senators to write the tax credit differently than the House approach. That House tax credit would only be allowed for American-built cars after 2027, and would be more generous for American-built cars from 2023 to 2026.
The Build Back Better Act that passed the House will offer an additional $4,500 tax credit for American-assembled electric vehicles from union plants, and it seems likely that the Senate version will strip the unionized portion of that, given West Virginia Democratic Sen. Joe Manchin's opposition. Georgia, which has two newly elected Democratic senators, also is home to a major electric battery manufacturer and a Kia plant. The Kia plant has not yet announced plans to make an electric car.
The Customs Rulings Online Search System (CROSS) was updated Dec. 2. The following headquarters rulings were modified recently, according to CBP:
Plans to increase a tax credit for electric vehicles containing a U.S.-made battery if the car was assembled in a U.S., union-represented plant is a source of worry for Canada, Prime Minister Justin Trudeau said in French Nov. 18 at a news conference after the North American Leaders' Summit, according to a story from the Canadian Broadcasting Corporation. "This would be quite a problem for vehicle production in Canada," he said. "We stressed this with the Americans throughout our conversations. They've heard us loud and clear." The provisions are part of the Build Back Better bill that passed the House the following day on Nov. 19.
Chambers of commerce in Canada, Mexico and the U.S. collectively are asking each country's leaders to hold each other accountable to fully implement USMCA. In a joint letter Nov. 16, they said, "The Canadian and Mexican private sectors share apprehension over differing interpretations of USMCA’s rules of origin and how the U.S. interpretation of these provisions poses risks to our integrated supply chains." They also said that the Canadian and U.S. private sectors are deeply concerned about Mexico's actions restricting investment in its energy sector. "Attempts to favor state-owned enterprises at the expense of renewable and other private energy providers only undermine investment certainty, put at risk ambitious shared goals to address climate change, and promise both added cost and diminished opportunity for our countries’ workers," they wrote, and said they hope government will engage the private sector in meaningful dialogue in both arenas. They also said in future emergencies like the pandemic, "there should also be greater cooperation on border management to ensure the flow of commercial traffic and cargo."