Even before Donald Trump’s inauguration in January, 2017, Justin Trudeau’s most senior aides rushed to New York to forge relationships with Jared Kushner, Steve Bannon and the other emerging players of Trumpworld. They saw Mr. Trump and his political agenda as a potential danger, and set out to influence it.
Four years later, when Joe Biden was elected, Mr. Trudeau’s inner circle breathed a sigh of relief. Mr. Trump was gone. And they knew these new people – Mr. Trudeau’s chief of staff, Katie Telford, is chummy with Mr. Biden’s campaign manager and deputy chief of staff, Jen O’Malley Dillon. Things were going to be more normal. Phew.
In retrospect, it would have been better to remain a bit more on edge. And to keep some of the strategies used with Mr. Trump.
The supposed kinship between Mr. Trudeau’s Liberals and Mr. Biden’s Democrats hasn’t led to a seamless relationship. The two countries couldn’t even co-ordinate the reopening of the border – Canada allowed fully vaccinated travellers to enter as of Aug. 9, but the United States waited three more months.
But there are bigger concerns now. When Mr. Trudeau heads to Washington next week for the Three Amigos summit of leaders of the U.S., Mexico and Canada, he will find the dangers to Canada’s economic interests haven’t gone away.
Mr. Biden isn’t Mr. Trump, but he is still a leader trying to harness economic nationalism in a divided U.S. political scene. And he’s backed by congressional Democrats who favour protectionist policies.
It’s not just the Buy American provisions in the big spending bills rolling through Congress. Instead of the tariffs threatened by Mr. Trump, there are proposals to give U.S. car buyers hefty incentives to buy American-made electric vehicles, which would encourage car makers to set up EV plants in the U.S., instead of Canada.
“It’s a bigger threat than anything pointed at us by Donald Trump,” said Flavio Volpe, president of the Automotive Parts Manufacturers’ Association.
The $12,500 electric-vehicle incentive in a bill now before Congress violates the USMCA trade agreement, Mr. Volpe argued, and would effectively act as a 33-per-cent tariff that would discourage U.S. consumers from buying Canadian-made cars.
In the U.S., the politics of this threat are different. Mr. Trump threatened tariffs to extract trade concessions and wanted to claim he won for America. This proposal includes three layers of Democratic politicking: It is an emissions-reducing climate-change measure; a Buy American protect-our-jobs policy; and a pro-union gift to organized labour. You only get the whole rebate if you buy a car made in a unionized plant.
To Canada, however, it is pretty similar. And it is pretty clear that there is still some distance between Canada and Mr. Biden’s America.
“Now it is clear that Canada-U.S. relations don’t just take care of themselves automatically,” said Maryscott Greenwood, CEO of the Canadian American Business Council and a lobbyist with Crestview Strategies.
Mr. Trudeau’s senior advisers couldn’t travel to press the flesh when Mr. Biden was elected. There was a pandemic. The transition period was marked by the Jan. 6 storming of Congress. Mr. Biden took over a divided country, and focused on domestic politics. Mr. Trudeau’s advisers have still tried to reach out to Mr. Biden’s, but until recently, mostly by phone.
But what is really missing is a Biden-era corollary to the full-court-press strategy that Mr. Trudeau’s government launched when Mr. Trump threatened to tear up NAFTA. Not the panic stations and the war room, but the lobby effort aimed at a broad cross-section of U.S. power players – legislators, governors, mayors, business and union leaders.
It turned out that the best way to influence the unpredictable Mr. Trump was through U.S. politics. We can expect that will be true of Mr. Biden, too.
Mr. Biden isn’t going to kill the EV incentive just to do Canada a favour. Mr. Trudeau’s government has to convince Americans, including Mr. Biden’s allies, that it isn’t in their interests. Mr. Volpe argued that Canada and Mexico could agree to offer the same incentive, to make it a North American electric-vehicle rebate – sidestepping the trade damage while joining the U.S. green initiative.
Of course, it is still possible that the electric-vehicle incentive, and its threat to Canada’s auto sector, will die in Congress. West Virginia Democratic Senator Joe Manchin, a key swing vote, is opposed. If it does, we can expect another such threat to come up in the future – so it would be wise to stay on edge.
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