Canadian Manufacturing

Key U.S. senator votes ‘no’ on Biden’s EV tax credit bill

Canada had warned senators that it would launch a barrage of retaliatory tariffs and suspend certain elements of the U.S.-Mexico-Canada trade agreement if the tax-credit plan went ahead.

December 20, 2021   The Canadian Press

The Prime Minister’s Office isn’t saying anything about a key U.S. senator’s decision to put President Joe Biden’s controversial electric-vehicle incentives on ice.

West Virginia Sen. Joe Manchin, a key Democratic vote in the evenly divided Senate, confirmed on Dec. 20 that he’s a “No” on the $1.75-trillion Build Back Better bill.

The legislation includes tax credits worth up to $12,500 on U.S.-assembled electric vehicles that are built with union labour — a devastating blow to the Canadian auto industry.

The plan has been atop the agenda of countless federal ministers and officials, including Prime Minister Justin Trudeau himself, during multiple in-person and virtual meetings in recent weeks.

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If officials in Trudeau’s office are breathing a little easier, however, they are refusing to say — likely in part because the reprieve could prove only temporary.

After months of meetings with colleagues and officials from Capitol Hill to the White House, including Biden himself, Manchin declared his position in an interview on Fox News.

“This is a ‘No’ on this legislation,” said Manchin, whose main concerns have been the true price tag of the “mammoth” climate and social-spending package, as well as its likely impact on a raging inflation rate.

And as a senator in a state where Toyota is a major employer, he’s acknowledged that he’s not wild about the EV tax credit scheme, either.

A Democrat in a state that supported Donald Trump by a large margin in the 2020 election, Manchin — up for re-election himself in 2024 — has been a focal point for every step of Biden’s legislative agenda.

He said the combination of rampant inflation, soaring federal debt, “geopolitical unrest” and a seemingly resurgent COVID-19 pandemic mean now is not the time for so much spending.

“I cannot vote to continue with this piece of legislation. I just can’t,” Manchin said. “I’ve tried everything humanly possible. I can’t get there.”

The news prompted a jarring response from the White House.

“Just as Sen. Manchin reversed his position on Build Back Better this morning, we will continue to press him to see if he will reverse his position yet again, to honour his prior commitments and be true to his word,” press secretary Jen Psaki said in a statement.

Canada had warned senators that it would launch a barrage of retaliatory tariffs and suspend certain elements of the U.S.-Mexico-Canada trade agreement if the tax-credit plan went ahead.

The proposal would amount to a 34 per cent tariff on electric vehicles assembled in Canada and violates the USMCA, Deputy Prime Minister Chrystia Freeland and Trade Minister Mary Ng wrote in a letter to Senate leadership.

Manchin’s declaration will likely buy Canada some valuable time, particularly given the chance that the Republicans win control of the Senate and potentially even the House after the midterms in 2022.