U.S. Eyes Trade Deals With Allies to Ease Clash Over Electric Car Subsidies
The Inflation Reduction Act provided $50 billion in tax credits to entice Americans to buy electric vehicles assembled in North America. To qualify for the subsidies, a portion of the materials used to make the batteries must come from nations that have free trade agreements with the United States. European and Asian countries have complained that the subsidies are protectionist actions that will lead to a global subsidy war. To ease these concerns with U.S. allies, Treasury Secretary Janet L. Yellen said on February 24 that a possible solution could be new agreements that would allow these countries to qualify as a free trade partner.