September 27, 2022

A Democratic deal, agreed to by Senate Majority Leader Chuck Schumer (D-CA) and Sen. Joe Manchin (D-WV), subsidizes electric vehicles made in Canada and Mexico — eliminating the Buy American” originally included in the legislation.

The Democrats’ “Inflation Reduction Act” is estimated to eliminate about 30,000 jobs in the United States, is set to be a major win for Mexican and Canadian automakers, as well as the multinational companies that outsource US jobs to each of the countries.

A provision originally included in the legislation initially gave thousands of tax credits to American consumers who buy electric vehicles made in the U.S. Although the credits go directly to consumers, they are a boon to automakers as they subsidize sales.

The goal, as with most Buy American rules, was to pressure automakers to bring auto manufacturing back to the U.S. and open state-of-the-art electric vehicle factories.

This arrangement, however, was changed to ensure that electric vehicles manufactured in Mexico and Canada can also qualify for the tax credits. The Canadian government has he claimed win with the change, noting that the credits will be a boost for their industry:

“It took Team Canada’s defense to get here,” [Canadian Trade Minister Mary] Ng said in a statement sent by email. “Since the prime minister’s first meeting with President Biden last year, we have relentlessly emphasized that the original proposal would have been detrimental to Canada as well and the US, so we’re glad to see that recognized in the new version of the bill.” [Emphasis added]

Canadian officials had made a major diplomatic effort over the winter to argue that the initial version would overturn decades of integration in the North American auto sector. The Mexican government also criticized the original proposal, calling it self-defeating for the US. [Emphasis added]

Now, Democrats are trying to go even further in benefiting corporate contractors for US jobs. Automakers that produce in China are lobbying for the implementation of provisions that prevent the use of tax credits on electric vehicles made with Chinese batteries.

Sen. Debbie Stabenow (D-MI) wants the legislation to subsidize companies that source their electric vehicle batteries from China, Russia and other foreign countries with strained relations with the US.

“Unfortunately after [the tax credits are] implemented … at this point, it looks like companies won’t be able to use them,” Stabenow said.

John Binder is a reporter for Breitbart News. Email him at Follow him on Twitter here.

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