Electric vehicles spark discord at Biden's trilateral summit

A primary goal for Trudeau during his two-day visit to Washington was to warn US officials about the consequences of Biden’s proposal for an electric vehicle.

“We have underlined the point to which this would be a major problem for auto production in Canada,” Trudeau said at a press conference late Thursday after the North American leaders’ summit. “We have underlined our position very clearly.”

Tensions overshadowed the continent’s first trilateral meeting of leaders since 2016, a party Biden convened on Thursday to restore North American ties after a strain under former President Donald Trump.

Biden seemed unmoved as he urged reporters on the question of the tax credit before meeting Trudeau. But the president offered some hope to the United States’ neighbors by suggesting that the controversial provision might struggle for survival.

“We don’t know what’s going to happen in the Senate, but there are many aggravating factors,” Biden said in the Oval Office when he asked a few questions about the proposal. “We’ll talk about it in detail, I’m sure of that.”

The House of Representatives was expected to pass the union-friendly electric vehicle tax credit as part of the $ 1.7 trillion social spending bill Thursday night. But the provision is likely to face serious opposition in the Senate, where Manchin, the moderate coal-fired state who is the key vote in the wafer-thin majority of Democrats, has strongly opposed it.

“This is wrong. It cannot happen. It is not what we are as a country”, Manchin told Automotive News last week after visiting a major antagonist Toyota auto plant in his state.

It is still unclear whether the Senate’s democratic leadership will push to keep the EV loan intact in the Reconciliation Act. Requests for comment to Majority Leader Chuck Schumer, Finance Committee Chair Ron Wyden, and Sen. Debbie Stabenow (D-Mich.), The determination’s primary sponsor, were not returned.

In general, the three leaders met at the White House for just under three hours, in addition to separate bilateral meetings, to discuss a range of other topics, including migration, climate change and security cooperation.

It is noteworthy that the heads of state and government did not attend a joint press conference that was previously characteristic of the North American heads of state and government summit and has become common when foreign heads of state or government visit the White House.

Trudeau was most willing to engage with the press and other Washington circles, hold a post-summit press conference at the Canadian Embassy, ​​and answer questions from the audience during an event at the Wilson Center think tank.

Mexican President Andrés Manuel López Obrador left Foreign Minister Marcelo Ebrard and other Mexican officials to discuss the summit at a press conference at the embassy.

Ebrard did not mention any discussions between the three heads of state or government over the tax credit – nor did he mention any issues raised by the summit. Instead, he repeatedly stressed that the meeting had gone well, called the summit “exceptional” and noted “good chemistry” between the heads of state and government, which “represents a new chapter in relations”. He also confirmed that leaders have agreed to meet again in Mexico City next year.

The senior Mexican official also signaled that several of the sensitive issues between the US and Mexico were not fully addressed, including López Obrador’s moves to curb private investment in Mexico’s energy sector. He also said there was no mention of the situation in Cuba and Nicaragua, despite a senior administration official said earlier this week that Biden would “safely” bring up the issue of Cuba as the US tries to build more international support against the Cuban regime’s repressive tactics .

Even before the house took up the package of expenses on Thursday, Biden’s electric vehicle tax credit scheme fueled fears north of the border that it would punish Canada’s deeply integrated auto sector.

The provision would provide $ 4,500 consumer tax credits for electric vehicles made with union operations in the U.S., in addition to other credits for the clean cars. This would put a number of foreign automakers at a disadvantage, such as Toyota, Volkswagen and Honda, which operate in non-union states and have spoken out loudly against the measure. But it would allow Biden to see a tangible victory for the organized labor force, one of his major constituencies, as well as workers in Midwestern states like Michigan, who will be critical to his re-election.

Chrystia Freeland, Trudeau’s deputy prime minister, told reporters on Wednesday that the proposal had the potential to become the “dominant topic” in Canada-US relations. She said Trudeau on Wednesday told House and Senate leaders Republicans and Democrats that Canada was “sure” that the incentives currently being formulated would violate the USMCA.

“Do you really want to hurt it in such a significant way so soon after its passage?” Freiland said. “That was one of the points we made. I think they heard us. “

The Biden government on Thursday disagreed with the Canadians’ argument.

“We don’t see it that way [as a violation of USMCA]“White House press secretary Jen Psaki told reporters. “We believe the electric vehicle tax credits are an opportunity to help consumers in this country. This is not the first time there have been consumer incentives and tax credits to bring prices down for consumers [and] to create an incentive for a step towards a clean energy industry. “

Mexican Economy Secretary Tatiana Clouthier wrote to US lawmakers in September to express deep concern about the proposal. It found this to be contrary to what the three countries agreed to in the USMCA and it should be “amended in accordance with the trade pact to include incentives for all North American content and compilation”.

After the summit, Trudeau declined to explain what solutions Canada was looking for in the course of the US legislative process. However, he argued that the plan would affect jobs in both countries.

“This approach that you are proposing is going to be bad not only for Canada but also for the United States,” he said.

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