Home New mexico tax Electric vehicles spark discord at Biden trilateral summit

Electric vehicles spark discord at Biden trilateral summit

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For Trudeau, warning U.S. officials of the fallout from Biden’s electric vehicle proposal was a top priority during his two-day visit to Washington.

“We emphasized how big a problem this would be for auto production in Canada,” Trudeau said at a press conference Thursday night after the North American leaders’ summit. “We have made our position very clear.

The tensions have eclipsed the first trilateral gathering of the continent’s leaders since 2016, a party Biden convened on Thursday in a bid to restore North American relations after tension under former President Donald Trump.

Biden appeared unmoved when reporters insisted on the tax credit issue ahead of his meeting with Trudeau. But the president offered some hope to neighbors in the United States by hinting that the controversial provision may struggle to survive.

“We don’t know what will happen in the Senate, but there are a lot of complicating factors,” Biden said in the Oval Office while answering a few questions about the proposal. “We will talk about this at length, I’m sure.”

On Thursday night, the House was due to pass the union-pro-union electric vehicle tax credit as part of the $ 1.7 trillion social spending bill. But the provision risks meeting serious opposition in the Senate, where Manchin, the moderate coal state that is the key vote of the slim Democratic majority, has voiced strong opposition.

“That’s wrong. It can’t happen. It’s not who we are as a country,” Manchin told Automotive News last week after visiting an auto plant owned by Toyota, a key opponent of the disposition, in its state.

It is still unclear whether the Democratic Senate leadership will push to keep the EV credit in the reconciliation bill intact. Requests for comment to Majority Leader Chuck Schumer, Finance Committee Chairman Ron Wyden and Senator Debbie Stabenow (D-Mich.), The main sponsor of the provision, were not returned.

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

Notably, the leaders did not attend a joint press conference that was previously characteristic of the North American Leaders’ Summit and has become customary during visits by foreign leaders to the White House.

Trudeau was most willing to engage with the press and other circles in Washington, hosting a post-summit press conference at the Canadian Embassy and answering questions from the public at an event at Wilson Think Tank Center.

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

Ebrard did not mention any discussions between the three leaders over the tax credit – nor any points of contention from the summit. Instead, he repeatedly stressed that the meeting was positive, calling the summit “extraordinary” and noting a “good chemistry” between the leaders that “represents a new chapter in the relationship.” He also confirmed that the leaders had agreed to meet again next year in Mexico City.

The senior Mexican official also reported that several of the thorny issues between the United States and Mexico had not been fully addressed, including steps taken by López Obrador to curb private investment in Mexico’s energy sector. He also said the situation in Cuba and Nicaragua was not mentioned, although a senior administration official said earlier this week that Biden would “certainly” bring up the subject of Cuba as the United States seeks to strengthen their international support against the repressive tactics of the Cuban regime.

Even before the House considers all expenses on Thursday, Biden’s electric vehicle tax credit plan fueled fears north of the border that it would punish Canada’s deeply integrated auto sector.

The provision would provide consumer tax credits of $ 4,500 for electric vehicles made with unions in the United States, in addition to other credits for 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 strongly opposed the measure. But it would allow Biden a tangible victory for the unions, one of his main constituencies, as well as for workers in Midwestern states like Michigan, which will be crucial to his re-election.

Chrystia Freeland, Deputy Prime Minister of Trudeau, told reporters on Wednesday that the proposal has the potential to become the “dominant problem” in Canada-US relations. She said Trudeau told senior Republicans and Democrats in the House and Senate on Wednesday that Canada was “certain” that the incentives, as currently worded, would violate the USMCA.

“Do you really want to rape him in such a big way so soon after he’s gone?” Freeland said. “It was one of the points we raised. I think they heard us.

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

“We don’t see it that way [as a violation of USMCA]White House Press Secretary Jen Psaki told reporters. “In our view, the electric vehicle tax credits are an opportunity to help consumers in this country. the first time there are incentives and tax credits for consumers, to lower prices for consumers [and] help encourage a move towards a clean energy industry.

Mexican Economy Minister Tatiana Clouthier wrote to U.S. lawmakers in September expressing serious concern about the proposal. She said it was contrary to what the three countries agreed to in the USMCA and that it should be “amended to include incentives for all North American content and assembly” in accordance with the trade pact.

Trudeau declined after the summit to specify the types of solutions Canada sought as the U.S. legislative process unfolded. But he argued the plan would hurt jobs in both countries.

“This approach they are proposing will not only be bad for Canada, but will also be bad for the United States,” he said.