Exclusive: Tom Cotton Plan Bans Wealthy European Nations from Cashing in on Biden’s Auto Subsidies

WASHINGTON - APRIL 19: Sen. Tom Cotton, R-Ark., questions Deputy Attorney Genera Lisa Mona
MANDEL NGAN/AFP via Getty Images/Bill Clark/CQ-Roll Call, Inc

A plan from Sen. Tom Cotton (R-AR), shared exclusively with Breitbart News, would prevent wealthy European nations like France and Germany from cashing in on electric vehicle subsidies included in President Joe Biden’s Inflation Reduction Act.

As Breitbart News has chronicled, Biden’s Inflation Reduction Act initially included Buy American rules that required United States automakers to source and produce electric vehicles in the U.S. in order to qualify for a federally-subsidized tax credit.

That provision, though, was changed to allow automakers to secure the tax credits so long as they sourced and produced electric vehicles in the U.S. or its so-called free trade partner countries like Mexico or Canada — a major win for the two countries as well as automakers that have outsourced for decades.

Through intense lobbying, the European Union (EU) is hoping the Biden administration will treat nations like France and Germany as similar so-called free trade partners despite there being no such agreements.

Cotton’s legislation, titled the “No [Electric Vehicle] Credits for Idle Allies Act,” would clarify that the U.S. does not have a free trade agreement with the EU and thus electric vehicles sourced and produced in France and Germany do not qualify for the tax credit.

Likewise, the legislation includes a fall-back measure whereby if the Biden administration claims that the EU is a free trade partner of the U.S., France and Germany will be excluded from the electric vehicle tax credit until they contribute an equal percent of GDP in support of Ukraine’s war with Russia.

“Wealthy European nations like France and Germany are reaping the benefits of American aid to Ukraine without paying their fair share for its defense,” Cotton told Breitbart News in a statement. “Now, these same countries are trying to secure American subsidies for electric vehicle manufacturing.”

An additional provision of Cotton’s legislation certifies that if France and Germany fail to match or exceed the same level of spending that the U.S. has committed in Ukraine, they will be barred from taking advantage of the electric vehicle tax credits until spending two percent of their GDP towards defense for two years.

“France and Germany should not receive these tax credits in the first place, but certainly not until they bear an equal share of the burdens of European defense,” Cotton said.

This month, reports circulated that the electric vehicle tax credits are already running into a major issue for the Biden administration as China dominates supply chains for raw materials like cobalt, lithium, and graphite — all needed to make electric vehicle batteries.

By 2025, for example, China is set to control a third of all of the world’s lithium.

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

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