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Electric vehicle wars
Ahead of the G-7 summit in Japan, PM Justin Trudeau stopped in South Korea to chat with President Yoon Suk Yeol about security and economic ties. At the top of Trudeau’s list of priorities? Convincing South Koreans that Ottawa remains committed to Canada’s first electric-vehicle battery plant in the state of Ontario that, according to the companies building it, is currently on the chopping block.
But what does an EV mega factory in Windsor, Ontario, have to do with … South Korea?
Quick recap: The companies involved, Canadian auto giant Stellantis and Korean battery maker LG Energy Solution, have invested $5 billion in a mega plant that is scheduled to open next year. The project’s goals are ambitious: produce 1 million EV batteries annually and hire up to 3,000 people by 2027.
But Stellantis abruptly stopped construction this week, saying that Trudeau’s government was “not delivering on what was agreed to.” Ottawa had pledged around $1 billion, but that was before the Biden administration’s Inflation Reduction Act, which incentivizes companies to build up the EV industry in the US exclusively, wooing them with lucrative subsidies.
In response to a recent deal Ottawa made to provide up to CAD$13 billion worth of subsidies to lure Volkswagen to build a plant in Canada, Stellantis and LG have gone back to the well, reportedly demanding more support from Trudeau and threatening to pull the plug unless it gets the same treatment as the German automaker.
The federal government, for its part, says that Ontario’s provincial government must also pay its “fair share” to fund the subsidies.
Indeed, this row shows that the ripple effects of Biden’s protectionist IRA – which has also caused skirmishes with Mexico – are still reverberating almost a year after the bill was passed.
Still, there are signs that some cross-border tensions over the issue are easing, with US Transport Secretary Pete Buttigieg announcing this week the creation of a nearly 900-mile EV charging corridor between Kalamazoo, Michigan, and Quebec City, the first of its kind.
Secretary Buttigiegspoke about this and more with Ian Bremmer on this week’s episode of GZERO World. Catch a clip here and the full interview on PBS stations starting this Friday. Check local listings.
NATO Summit most important post-Berlin Wall
Ian Bremmer shares his insights on global politics this week on World In :60:
First, what is the significance of Japan and South Korea's presence at the NATO summit?
First of all, this is by far the most important NATO summit we've seen since the Wall has come down. Japan and South Korea, a very big deal. Trilateral meeting with President Biden, the two American allies most important that have a dysfunctional relationship, fundamentally dysfunctional on the global stage, and increasingly they are trying to align Kishida, the Prime Minister, and Yoon, the President of South Korea, trying to make that happen. Also, we're increasingly seeing a transformation of NATO to not just being a North Atlantic Alliance, but increasingly taking on global security issues. China's more of a focus. Asian allies, more of a focus. Keep in mind, New Zealand and Australia also there.
Okay, with China lowering its quarantine period, do they finally have control of COVID-19?
No, they're lowering their quarantine period, but it's still very extended for anybody that would be thinking about coming. It's not like they're going to open up for tourists all of a sudden, or even a lot of business travel. And secondly, they are also increasing testing. Those are all things that are going to eventually help move them towards normalization, but they are still minimum of months away from anything that would look like a post zero-COVID policy. I think it's probably mid-2023 is what we're really looking at.
Also, will new G7 sanctions on Russia be effective at stopping the war in Ukraine?
No, no they won't. The only thing that's going to stop the war in Ukraine, frankly, is the Russians running out of troops and getting exhausted, which is closer to coming. And that means territorial gains are going to be harder to come by over the coming months and then we're closer to a frozen conflict. But that doesn't end the war, it just freezes the war. And that's a big problem because it means that Russia's relationship with NATO going forward is fundamentally broken, fundamentally hostile, and cold war with elements of hot war.