Biden’s “buy american” policy settles with Mexico and Canada

US President Joe Biden welcomed Canadian and Mexican leaders at the White House this Thursday (18) for his first Summit of North American Leaders.

The talks, however, did not move forward, due to the protective measures that the American government intends to put in place, mainly to boost its electric vehicle industry.

The meeting aims to revitalize regional cooperation, but economic tensions are putting its goals under threat.

Biden met with Canadian Prime Minister Justin Trudeau and was to sit with Mexican President Andres Manuel Lopez Obrador, followed by a meeting of the three.

The talks aim to find common ground between the three neighbors united by the US-Mexico-Canada free trade agreement (USMCA), which governs about $1.5 trillion in US trade annually.

But differences over the auto industry, “buy American” policies and a Mexican energy bill weighed against understanding between the countries.

While big strides may be difficult to come by, Biden hopes to make progress on some of the thorniest challenges with his two neighbors, including alleviating immigration pressures, reducing trade friction, recovering from the global pandemic and competing better against China.

Among the possible deals still awaited are those on new curbs on methane emissions and Covid-19 vaccine donations, according to senior officials in the Biden administration.

The deals stem from Biden’s pressure to revive the so-called Three Friends, a task force abandoned by its predecessor, Donald Trump.

Restoring ties with Mexico and Canada is also part of Biden’s effort to turn the page on the Trump era, shifting his predecessor’s strident approach to a more collaborative style.

Trump had especially difficult negotiations with Trudeau, imposing tariffs on some Canadian products and sometimes hurling public insults at the Canadian prime minister.

Lopez Obrador, a left-wing populist, managed to establish an unlikely working relationship with Trump despite economic threats and the Republican president’s insults against Mexicans over migration.

Nearly 10 months after taking office, Biden could use a diplomatic standpoint.

The US president faces declining public approval ratings and is trying to contain inflation and supply chain problems, while facing record numbers of migrants arriving at the US-Mexico border.

Vaccines and gas emissions

US officials expect the three US countries to agree to reduce methane emissions in their oil and gas sectors by 60% to 75% by 2030 as countries work to contain the potent greenhouse gas.

Canada and Mexico will also announce that they are donating millions of doses of vaccines – initially lent by the United States – to other countries, said one of the authorities, who declined to be identified.

In addition, leaders must commit to banning imports of products made with forced labor, a policy the US government has been working toward in China.

Western activists and politicians accuse the Chinese government of using forced labor in northwestern China’s Xinjiang province, a claim Beijing denies.

But Canada and Mexico are concerned about Biden’s “buy american” clauses, as well as a proposed electric vehicle tax credit that would favor unionized manufacturers based in the US.

“Let’s talk about this,” Biden said in response to a reporter’s question as he sat down to talk to Trudeau. “It hasn’t even gone through the Chamber yet… There are a lot of complicated factors.”

US House Speaker Nancy Pelosi said lawmakers could vote on Biden’s broad “Build Back Better” legislation on Thursday, which includes the tax credit for electric vehicles.

Canada claims the tax credit would violate the rules of the United States-Mexico-Canada Agreement (USMCA).

The White House insists that is not the case. However, the Biden government’s spending to reduce emissions and strengthen the US labor market includes up to $12,500 in tax credits for US-made electric vehicles, in addition to a $4,500 credit for vehicles made by unionized American companies. .

Before meeting Biden, Trudeau and Lopez Obrador met separately. After the negotiations, Mexico’s Ministry of Foreign Affairs said the two countries will seek more inclusive economic integration under the USMCA.

The United States is Mexico and Canada’s main trading partner, and cars and trucks are the most traded manufactured products among the three.

Canada and Mexico want a level playing field as they compete to entice companies to establish factories for the electric vehicle supply chain.