The European Commission has raised concerns with the U.S. that its tax incentives for electric cars could violate WTO rules, EU trade commissioner Valdis Dombrovskis said.
"We agreed our teams are going more in depth," Dombrovskis said on the sidelines of a G7 trade ministers meeting in Germany on Thursday.
The EU and South Korea have objected to tax credits for purchases of electric vehicles included in the $430 billion climate, health and tax bill signed into law by President Joe Biden last month. The EU and South Korea say the incentives may discriminate against foreign-made vehicles and breach World Trade Organization rules.
The bill restructures the existing $7,500 new-EV tax credit and creates a $4,000 rebate for used EVs. It also includes tens of billions of dollars in new loan, tax credit and grant programs for automakers to build cleaner vehicles.
The Alliance for Automotive Innovation, a U.S. trade group that represents Volkswagen, General Motors, Toyota and Ford among others, last month said the law would make 70 percent of 72 U.S. electric, plug-in hybrid and fuel cell EVs that currently qualify for tax credits ineligible.
Dombrovskis met with U.S. Trade Representative Katherine Tai on Wednesday and the two agreed to continue discussions.