Trudeau arrives in U.S. with last-minute warning for Democrats about electric vehicle tax credit

Prime Minister Justin Trudeau arrived in Washington D.C. today with a warning about legislation Democratic lawmakers are on the cusp of advancing through Congress.

The prime minister is in town for a two-day visit as American legislators complete a massive budget bill that includes an electric vehicle tax credit bitterly opposed by the United States' trading partners.

Trudeau planned to raise those concerns during a Capitol Hill meeting today with the leaders of the House of Representatives and the Senate, and again on Thursday with President Joe Biden.

He mentioned them today in his first public stop in the U.S. capital, at a public forum at the Wilson Center think-tank.

The prime minister argued that the tax credit plan flies in the face of decades of continental integration of the auto sector, from the signing of the 1965 Auto Pact to the new North American trade deal.

"We are a little bit concerned about the zero-emission vehicle mandates, or rebates," Trudeau said at the event, moderated by former U.S. ambassador to Canada David Jacobson.

"[That] could have a real negative impact."

Trudeau's message to Americans is that the credit, as it's currently designed, would do more than hurt the countries that export autos to the U.S. — that it would damage continental supply chains and penalize U.S. workers whose products are exported for assembly.

But he's in a race against time.

Democrats hope to pass a version of the bill through the House of Representatives any day now. The bill faces a bumpier ride in the Senate, where lawmakers hope to complete its adoption this year.

The bill includes new spending on family programs, health care and climate change, and a credit worth $12,500 toward the purchase of electric vehicles.

That last measure is designed to steer electric vehicle production to Michigan and to its unionized plants. More than a third of that rebate is applicable only to purchases of vehicles assembled in the U.S. by union workers, and in 2027 the entire credit will apply only to those vehicles.

Trudeau said this could hurt American companies exporting to non-U.S. plants, while undermining the competitiveness of the entire North American auto sector.

"Doing this together is good for all of us," Trudeau said, adding that recent strains on supply chains around the world made it clear that countries need reliable allies.