President Biden and Canadian Prime Minister Justin Trudeau vowed Thursday to hash out a dispute over a U.S. tax credit for consumers who buy electric vehicles, which Canadian officials say violates a trade agreement.
“We’re going to talk about that to some extent,” Mr. Biden said in response to a question about the dispute.
The pair met in the Oval Office ahead of the first trilateral summit between the leaders of the U.S., Canada and Mexico since 2016.
Mr. Biden and his counterparts are expected to discuss a wide range of issues, but the electric-vehicle tax credit looms over the summit.
The president has proposed offering consumers up to $12,500 in tax credits if they buy electric vehicles assembled by union workers using American-built batteries.
Electric vehicles made in non-union factors would qualify for a credit worth about $4,500 less.
Canadian and Mexican officials say the proposal violates the U.S.-Mexico-Canada Agreement, or USMCA. The pact is a Trump-era agreement to boost trade among the three nations.
They also allege that the tax credit would hurt U.S. companies that supply Canadian and Mexican automobile plants and disrupt the trade agreement.
In a letter to U.S. lawmakers, Canadian Trade Minister Mary Ng said the tax credit would cause “serious and irreparable” harm to Canadian automobile manufacturers and “by extension,” U.S. car markers.
The White House has defended the tax credits, saying it is a way to promote jobs and promote choice among consumers.