Buy US legislation passed by US Congress on Friday

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Local auto industry officials believe Canada must play the long game and not be afraid to use the leverage of essential minerals and trade dispute mechanisms if necessary to secure an exemption from US requirements. proposals for reimbursement of electric vehicles that threaten to harm the Canadian auto industry.

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The discounts, worth up to US $ 12,500 per car, would only apply to electric vehicles manufactured in US factories with a unionized workforce.

The Buy American Bill was passed by the US Congress on Friday and is now heading to the Senate for consideration.

Automate Canada President Shelley Fellows said she was concerned about what she saw of US President Joe Biden at Thursday’s North American Leaders Summit meeting involving Prime Minister Justin Trudeau and the Mexican President Andres Manuel Lopez Obrador.

“It was so disappointing that there was no movement or open attitude on the president’s side,” Fellow said.

We have been placed in a position which is truly an internal process in the United States.

“He really wowed the Prime Minister after going to Detroit (Wednesday) to double the size of the electric vehicle subsidy.

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“However, I’m one of those people who thinks that when you’re trying to make changes, successes are a long way to go. It’s going to take a while to get the needle to move.

An electric vehicle charging station is on display at Devonshire Mall in Windsor on Friday, November 19, 2021.
An electric vehicle charging station is on display at Devonshire Mall in Windsor on Friday, November 19, 2021. Photo by Dan Janisse /Windsor Star

The fellows said the rebate program would have a devastating effect on the Canadian auto industry and the supply chain that supports it. She said the impact would be worse than former President Donald Trump’s steel and aluminum tariffs.

“This discourages automakers from investing in Canada,” Fellows said.

“It would empty our industry and it has real consequences.

“It would have an impact on jobs, innovation and new investments in technology.”

Canadian Association of Mold Makers President Jeanine Lassaline-Berglund said suppliers are closely monitoring these developments. She added that the uncertainty surrounding the auto industry over the past decade is one of the reasons many in her organization have diversified considerably.

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“As you can imagine, all the producers that supply the auto industry are watching this unfold,” Lassaline-Berglund said.

“It’s important to remember that most of our members have diverse portfolios and may not be 100% dependent on the auto industry today, although a good group still has a high percentage of work in it. that sector.

“With the work our government has done to navigate the CUSMA deal, we are confident that they have been asserting our country’s position with US officials as strongly as possible. “

An electric vehicle charging station is on display at Devonshire Mall in Windsor on Friday, November 19, 2021.
An electric vehicle charging station is on display at Devonshire Mall in Windsor on Friday, November 19, 2021. Photo by Dan Janisse /Windsor Star

Center for Automotive Research and Education director Peter Frize fears Canada is caught up in US domestic politics.

Biden’s Buy American platform was a mainstay of his presidential campaign and it won’t be easily watered down.

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“It’s locked into a political process in the United States and there’s not much we can do right now,” Frize said.

“There are (American) elections coming up and each side has its own program. We have been placed in a position which is truly an internal process in the United States ”

One silver lining is that observers believe that there are many US national interests that will eventually coalesce around the position of the Canadian and Mexican governments.

For example, vehicles manufactured in the United States by Toyota, Honda, Volkswagen and Tesla would not all qualify for the rebate because their factories are not unionized.

With many factories now located in right-to-work states in the southeastern United States, Fellows believes regional politics will come into play.

“If I’m a governor in one of these states, I’m not happy with it,” Fellows said. “Those businesses that are not eligible for the rebates, I would expect them to generate more public stench.

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“They have made massive investments in the United States and that sends them a very negative message.”

Frize said the industry’s tightly integrated North American supply chain will also prove to be a very difficult obstacle to enforcement.

“The supply chain is tangled and it’s difficult to determine what the US or Canadian content is because the parts come and go across the border,” Frize said.

“It’s not practical to sort it out quickly. It would take several years.

“The voice of the industry itself is going to be important. I’m sure they’re telling their side of the story to American officials.

While persuasion is the preferred tactic, industry watchers agree that Canada must be prepared to use whatever leverage it has.

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Federal and provincial government officials have sent letters to Washington clearly stating that Canada will initiate trade dispute resolution mechanisms.

  1. U.S. President Joe Biden tests a GMC Hummer EV as he tours the General Motors Factory ZERO electric vehicle assembly plant in Detroit, Michigan, November 17, 2021.

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  2. Andres Manuel Lopez Obrador, President of Mexico, from left, US President Joe Biden and Justin Trudeau, Prime Minister of Canada, arrive for the North American Leaders' Summit in the East Room of the White House in Washington on 18 November 2021.

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  3. Windsor Mayor Drew Dilkens speaks at a press conference in this June 1 file photo.

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Americans were also reminded of their desire for a North American supply chain to access essential Canadian minerals needed for electric batteries.

“If they accept this tax incentive, Canadians will demand that we respond as well,” Ontario Economic Development Minister Vic Fedeli said when asked this week whether access to essential minerals should be improved. a bargaining chip in conflict.

“The tearing up of a section of NAFTA 2.0 that was fundamental to the signing of our two governments, it could degenerate into a serious trade problem. This is a huge deal and it also has implications for jobs in the United States. “

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Twitter.com/winstarwaddell

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