Canada fires back at U.S. over EV tax credits

WASHINGTON - Canada is threatening to take a hard line with the United States if senators approve President Joe Biden's controversial tax credits for electric vehicles.

In a letter to key members of the U.S. Senate, Deputy Prime Minister Chrystia Freeland and Trade Minister Mary Ng are promising retaliatory tariffs on American products if the tax credit proposal becomes law.

The letter says Canada is getting ready to publish a list of U.S. products it would be willing to target, including within — but not limited to — the auto sector.

The letter also threatens to hit the pause button on concessions to U.S. dairy producers under the U.S.-Mexico-Canada Agreement.

Freeland and Ng say Canada doesn't want to go down a "path of confrontation," noting the chance for the two countries to work together on promoting the growth of electric vehicles across North America.

They say the U.S. could solve the problem by ensuring Canadian-made vehicles and batteries are also eligible for the credit, which if passed would be worth up to $12,500 for a U.S. car buyer.