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    Rural Georgia Factory, Flush With Federal Funds, Votes to Unionize

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    Friday’s victory by the United Steelworkers at a factory building electric school buses was a test for Democratic hopes that clean-energy funding from Washington could bolster organized labor.Workers at a rural Georgia factory that builds electric school buses under generous federal subsidies voted to unionize on Friday, handing organized labor and Democrats a surprise victory in their hopes to turn huge new infusions of money from Washington into a union beachhead in the Deep South.The company, Blue Bird in Fort Valley, Ga., may lack the cachet of Amazon or the ubiquity of Starbucks, two other corporations that have attracted union attention. But the 697-to-435 vote by Blue Bird’s workers to join the United Steelworkers was the first significant organizing election at a factory receiving major federal funding under legislation signed by President Biden.“This is just a bellwether for the future, particularly in the South, where working people have been ignored,” Liz Shuler, president of the A.F.L.-C.I.O., said Friday evening after the vote. “We are now in a place where we have the investments coming in and a strategy for lifting up wages and protections for a good high-road future.”The three bills making up that investment include a $1 trillion infrastructure package, a $280 billion measure to rekindle a domestic semiconductor industry and the Inflation Reduction Act, which included $370 billion for clean energy to combat climate change.Each of the bills included language to help unions expand their membership, and Blue Bird’s management, which opposed the union drive, had to contend with the Democrats’ subtle assistance to the Steelworkers.Banners appeared outside the Blue Bird plant in the period leading up to the union vote.Jonathan Weisman/The New York TimesBlue Bird stands to benefit from the new federal funds. Last year, it hailed the $500 million that the Biden administration was providing through the infrastructure bill for the replacement of diesel-powered school buses with zero- and low-emission buses. Georgia school systems alone will get $51.1 million to buy new electric buses, but Blue Bird sells its buses across the country. Still more money will come through the Inflation Reduction Act, another law praised by the company.But that money came with strings attached — strings that subtly tilted the playing field toward the union. Just two weeks ago, for instance, the Environmental Protection Agency, which administers the Clean School Bus Program, pushed a demand on all recipients of federal subsidies to detail the health insurance, paid leave, retirement and other benefits they were offering their workers.They also required the companies to have “committed to remain neutral in any organizing campaign and/or to voluntarily recognize a union based on a show of majority support.” And under the rules of the infrastructure bill, no federal money may to be used to thwart a union election.The Steelworkers union used the rules to its advantage. In late April, it filed multiple unfair labor practice charges against Blue Bird’s management, citing $40 million in rebates the company had received from the E.P.A., which stipulated that those funds could not be used for anti-union activity.“The rules say if workers want a union, you can’t use any money to hire anti-union law firms, or use people to scare workers,” Daniel Flippo, director of the Steelworkers district that covers the Southeast, said before the vote. “I’m convinced Blue Bird has done that.”Politicians also got involved. Georgia’s two Democratic senators and southwestern Georgia’s Democratic House member also subtly nudged the plant’s management, in a union-hostile but politically pivotal state, to at least keep the election fair.“I have been a longtime supporter of the USW and its efforts to improve labor conditions and living standards for workers in Georgia,” the Democratic congressman, Representative Sanford Bishop, wrote of the United Steelworkers in an open letter to Blue Bird workers. “I want to encourage you in your effort to exercise your rights granted by the National Labor Relations Act.”Blue Bird’s management minimized such pressure in its public statements, even as it fought hard to beat back union organizers.“Although we respect and support the right for employees to choose, we do not believe that Blue Bird is better served by injecting a labor union into our relationship with employees,” said Julianne Barclay, a spokeswoman for the company. “During the pending election campaign, we have voiced our opinion to our employees that a union is not in the best interest of the company or our employees.”Friday’s union victory has the labor movement thinking big as the federal money continues to flow, and that could be good for Mr. Biden and other Democrats, especially in the pivotal state of Georgia.“Workers at places like Blue Bird, in many ways, embody the future,” Mr. Flippo said after the vote, adding, “For too long, corporations cynically viewed the South as a place where they could suppress wages and working conditions because they believed they could keep workers from unionizing.”The Blue Bird union shop, 1,400 workers strong, will be one of the biggest in the South, and union leaders said it could be a beachhead as they eyed new electric vehicle suppliers moving in — and potentially the biggest, most difficult targets: foreign electric vehicle makers like Hyundai, Mercedes-Benz and BMW, which have located in Georgia, Alabama and South Carolina in part to avoid unions.“Companies move there for a reason — they want as smooth a path toward crushing unions as possible,” said Steve Smith, a national spokesman for the A.F.L.-C.I.O. “But we have federal money rolling in, a friendly administration and a chance to make inroads like we have never had before.”The Blue Bird plant, which rises suddenly off a rural highway lined with peach and pecan orchards, has long made it a practice to hire less educated workers, some of whom have prison records and most of whom start at $16 or $17 an hour, said Alex Perkins, a main organizer for the United Steelworkers in Georgia.A union was a tough sell for such vulnerable workers against a management that was fiercely opposed, organizers conceded. Coming off the last shift of the day on Thursday, most workers declined to speak on the record. A clutch of about a dozen workers stood on Friday at the Circle K gas station across the street from the plant in the predawn darkness, holding pro-union signs as the first workers arrived to cast ballots under the gaze of National Labor Relations Board monitors.But Cynthia Harden, who has worked at the plant for five years and voted in favor of organizing, did talk about the pressure workers were under to vote against it. Slide shows on the voting process, which showed ballots marked “no,” said that the company could go broke if the union won, and there was a sudden appearance of food trucks at lunch and banners on the perimeter fence reading, “We Love Our Employees!”“They’ve made some changes already, but if the union hadn’t started, nothing would have happened,” she said.The letter that Georgia’s Democratic senators, Raphael Warnock and Jon Ossoff, wrote to Matt Stevenson, Blue Bird’s chief executive and president, was remarkably timid, praising the company for its cooperation and its well-paying jobs before “encouraging all involved, whatever their desired outcome, to make sure that the letter and the spirit of the National Labor Relations Act are followed.”Mr. Perkins fumed at that tone, considering the work that unions had put in to help Mr. Warnock win re-election last year. “I won’t forget it next time,” he said.Both senators declined requests to comment on the election. More

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    In Ohio, Electric Cars Are Starting to Reshape Jobs and Companies

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    Erick Belmer has seen how tough the car business can be. He was working at a General Motors plant in Lordstown, Ohio, when it shut down in 2019, devastating the community.Mr. Belmer, an industrial mechanic, got another job at a G.M. transmission factory in Toledo, but his commute is now 140 miles each way. His schedule gives him just a few hours with his family and a few hours of sleep.Yet far from being bitter, Mr. Belmer says he is excited. G.M. is converting his factory to produce electric motors, part of an industrial transformation that will redefine manufacturing regions and jobs around the world.G.M., Ford Motor and other carmakers announced investments of more than $50 billion in new factories in the United States last year, according to the Center for Automotive Research in Ann Arbor, Mich. All but a small fraction of that money was to build and retool plants for electric vehicles and batteries.Mr. Belmer is one of thousands of people who will also have to pick up new skills. “It’s going to be a little bit of a learning curve,” he said at the Toledo factory. “But our guys are well equipped to handle this.”Mr. Belmer and Ohio are bellwethers of how the transition to electric vehicles will play out. G.M., Jeep, Honda Motor and parts makers employ many thousands of people across this state.Gas transmissions at G.M.’s plant in Toledo. G.M. has committed to retraining the workers there to make electric motors, and to investing $760 million to convert the plant’s assembly lines.Ohio’s experience may signal how the transition to electric vehicles will play out for workers.An electric drive unit on display at the G.M. plant.Ohio produces more internal combustion engines than any other state, making an adjustment to electric cars particularly urgent. Nearly 90,000 people work in Ohio for carmakers or parts suppliers, and several times that many are employed by businesses that serve those autoworkers and their families.The changes are putting Ohio at the forefront of a new technology that is critical to fighting climate change. But some jobs will become obsolete, and some companies will go bankrupt. It’s an open question whether the winners will outnumber the losers.“This is the largest transition in our industry since its inception,” said Tony Totty, the president of a United Auto Workers local that represents G.M. workers in Toledo.Mr. Totty is optimistic about the members of his local. But he is worried about other colleagues whose jobs are tied to gasoline engines, he said.There is “an expiration date on those facilities and those communities,” Mr. Totty said.Warren, in eastern Ohio, knows what happens when a carmaker leaves town. The city lost one-third of its population, about 20,000 people, after G.M. closed the factory in nearby Lordstown, which produced Chevrolet Cruze sedans, in 2019. Sales of that car had been fading as more Americans chose sport utility vehicles.Even before that shutdown, auto production jobs had been declining. U.S. automakers and their parts suppliers employed about one million people at the end of 2018, down from more than 1.3 million in 2000. In the years before G.M. closed the Lordstown plant, it had reduced shifts and pared its work force.“Our biggest export for the last 20 years has been talented young people,” said Rick Stockburger, the president of Brite Energy Innovators, an organization in Warren that offers work space, advice and funding to start-ups.Today, things are looking somewhat better. Ultium Cells, a joint venture of G.M. and LG Energy Solution, is ramping up production of batteries near the defunct factory.Tony Totty, the president of the United Auto Workers local that represents G.M.’s workers in Toledo, said the current moment represented “the largest transition in our industry since its inception.”Foxconn, a Taiwanese manufacturer, has taken over the old G.M. plant and plans to produce electric vehicles and tractors there. The complex will also house an “electric vehicle academy” established by Foxconn and Youngstown State University to train workers.That surge in investment is helping to revive Warren’s tidy but sleepy downtown. Doug Franklin, the mayor, who worked for G.M. in Lordstown, said he was pleased recently to step into a local restaurant where “nobody knew me, because we had so many new people.”Mr. Franklin represents the optimistic view — that an industrial renaissance is underway. The pandemic and the supply chain chaos that it caused have made companies leery of components produced far away. That experience, plus billions in federal subsidies approved by Democrats last year, motivated manufacturers to build vehicles, batteries and other components in the United States.“We’re seeing a new level of hope that I haven’t seen in decades,” Mr. Franklin said.But community leaders in Warren are also aware that the transition comes with risks.Hopes that the old plant will become a buzzing electric vehicle factory have not panned out, so far. G.M. sold the factory to Lordstown Motors, a fledgling electric pickup truck company that ran into trouble and resold the plant to Foxconn.Executives at Foxconn, which has long assembled electronic devices but has little experience making cars, declined interview requests. It’s not clear when the company will mass-produce electric vehicles in Lordstown, if ever.The Rev. Todd Johnson, the pastor of the Second Baptist Church in Warren and a member of the City Council, worries that his mostly African American parishioners won’t benefit from the new jobs.Mr. Johnson, whose parents worked for G.M., encourages young people to study subjects like robotics and coding, and has led after-church trips to a science and technology center in nearby Youngstown.“There are going to be opportunities coming,” he said, “and I desperately don’t want to see the next generation of our children miss out.”One pressing question is what will happen to people whose skills are no longer needed.Eric Gonzales, the executive director of G.M.’s Toledo factory, says the plant will need at least as many workers as it has today, as it replaces its gasoline models with electric ones.G.M. is dealing with that issue at the Toledo factory, Toledo Propulsion Systems, which makes transmissions that electric cars won’t need. The automaker has committed to retraining the Toledo workers to make electric motors, and to investing $760 million to convert assembly lines at the plant.If anything, G.M. will need more workers, said Eric Gonzales, the executive director of the factory, as it replaces gasoline models with electric cars. “We’re taking the employees with us.”The G.M. factory in Toledo will show whether established automakers can compete with Tesla, the fast-growing automaker that can focus all of its resources on electric vehicles because that’s all it makes. Established carmakers need to keep earning money from internal combustion vehicles while ramping up a new technology that is not yet profitable.G.M. has an advantage, Mr. Gonzales said, because it has factories equipped with sprinkler systems, high-voltage power and other essentials. “We already have the four walls here with the infrastructure,” he said, speaking above the din of clanking machinery. “Somebody new, they have very expensive capital costs.”Other auto executives prefer to start fresh. Volkswagen’s new Scout Motors unit looked at sites in Ohio and other states to produce electric pickup trucks and S.U.V.s, but chose to build a $2 billion factory in South Carolina.It’s cheaper and easier to build from scratch, said Scott Keogh, the chief executive of Scout. “You’re not juggling this classic dynamic of a legacy internal combustion engine plant where you need to inject a new electric vehicle,” he said.Workers placing batteries in hybrid vehicles at the Honda plant in Marysville, Ohio.Ohio is in intense competition with other states to attract investment. But Midwestern states, including Michigan, Indiana and Illinois, have been less successful than states in the South where Republican political leaders have courted investment aggressively — even as they denounce the Democratic policies that helped create the boom.Since 2020, automakers have announced investments of $51 billion in electric vehicle and battery production in the South, compared with $31 billion in states in the Great Lakes region, according to the Center for Automotive Research.Southern states tend to have lower labor costs, in part because most auto plants there are not unionized. This could pose a problem for the United Auto Workers and President Biden, who want the switch to electric vehicles to create more high-paying union jobs. It could well be that most of the new electric car and battery jobs will end up in the South, where unions face political opposition, and not in the Midwest, where unions have political clout — and where most of the jobs lost in combustion engine vehicles once were.Ohio has some things going for it. In March, Honda Motor said it would convert one of two assembly lines at its decades-old plant in Marysville, near Columbus, to build electric vehicles. Honda, a Japanese company, is also building a battery factory about an hour away, in Jeffersonville, with LG Energy Solution.In Ohio, Honda employs more than 14,000 people making cars and motors, and the company’s plans will show whether electric vehicles, which require fewer parts than gasoline cars, will create or destroy jobs.Honda’s assembly line of electric-car batteries at its Marysville plant.For the next several years, the transition will probably create jobs as carmakers make both gasoline and electric vehicles. Bob Nelson, the executive vice president of American Honda Motor, noted that, at the moment, there was a shortage of skilled labor. “We’re going to need everybody,” he said in Marysville, where Honda makes Accord sedans.What happens later is less certain. “When you don’t have the complexity that we’re used to, with engines and transmissions and mufflers and radiators and exhaust systems and all those components that aren’t going to be there anymore,” said Bruce Baumhower, the president of a United Auto Workers local that represents employees of auto suppliers in Ohio, “it makes me wonder what’s left.”Dana Incorporated, based in Maumee, near Toledo, is also grappling with that question. Dana’s employees — more than 40,000 of them — make axles, drive shafts and other parts. Electric vehicles need axles but typically do not need long drive shafts because the motors can be placed close to the wheels.James Kamsickas, Dana’s chief executive, has spent time in China and has been struck by the proliferation of electric vehicles there. Recognizing the threat to some of Dana’s products, Mr. Kamsickas acquired several firms with expertise in electric motors and other technology.James Kamsickas, right, Dana’s chief executive, has acquired several firms with expertise in electric motors and other technology.Dana now offers axles with electric motors built in, saving weight and energy, and it has deployed its expertise in gaskets to make equipment for cooling electric-car batteries that G.M. plans to use. Most of Dana’s orders are for products related to electric vehicles.Ohio’s economic future hinges on whether other companies make similar leaps. “You don’t have a choice,” Mr. Kamsickas said. “Sooner or later, you’d be a melting iceberg.” More

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    Lawmakers Rebuke Biden for Bypassing Congress in Trade Deal With Japan

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    A statement from two Democrats called the Biden administration’s deal “unacceptable,” saying it should have been made available to Congress and the public for review.WASHINGTON — Lawmakers on Tuesday issued a sharp rebuke of a limited trade deal the Biden administration reached with Japan, saying that it should have been made available to Congress and the public for review and that it lacked important protections for the environment and workers.In a statement viewed by The New York Times, Representative Richard E. Neal of Massachusetts, the Democratic ranking member of the Ways and Means Committee, and Senator Ron Wyden, Democrat of Oregon and the chairman of the Finance Committee, called the agreement “unacceptable.”“Without enforceable environmental or labor protections, the administration abandons worker-centric trade policy and jeopardizes our climate work by opening the door for another environmental catastrophe,” wrote the lawmakers, who are the two most powerful Democrats in Congress on trade issues.“Agreements should be developed transparently and made available to the public for meaningful review well before signing,” they added, “not after the ink is already dry.”The Biden administration announced late Monday that it had reached an agreement with Japan over supplies of critical minerals like lithium, cobalt and nickel, which are used to make car batteries. The agreement provides a potential workaround for the Biden administration in its disagreement with allies over the terms of the Inflation Reduction Act, which invests $370 billion to transition the United States to cleaner cars and energy sources.That law has angered some allies who were excluded from its benefits, which include generous tax incentives for companies that make electric vehicles in North America or source material for batteries from the United States or countries with which it has a free-trade agreement. That category does not include Japan or European Union countries.But because the Inflation Reduction Act does not technically define what constitutes a free-trade agreement, U.S. officials have found what they believe to be a workaround. They are arguing that countries will be able to meet the requirement by signing a more limited trade deal instead. The Treasury Department is expected to issue a proposed rule this week clarifying the provisions of the law..css-1v2n82w{max-width:600px;width:calc(100% – 40px);margin-top:20px;margin-bottom:25px;height:auto;margin-left:auto;margin-right:auto;font-family:nyt-franklin;color:var(–color-content-secondary,#363636);}@media only screen and (max-width:480px){.css-1v2n82w{margin-left:20px;margin-right:20px;}}@media only screen and (min-width:1024px){.css-1v2n82w{width:600px;}}.css-161d8zr{width:40px;margin-bottom:18px;text-align:left;margin-left:0;color:var(–color-content-primary,#121212);border:1px solid var(–color-content-primary,#121212);}@media only screen and (max-width:480px){.css-161d8zr{width:30px;margin-bottom:15px;}}.css-tjtq43{line-height:25px;}@media only screen and (max-width:480px){.css-tjtq43{line-height:24px;}}.css-x1k33h{font-family:nyt-cheltenham;font-size:19px;font-weight:700;line-height:25px;}.css-1hvpcve{font-size:17px;font-weight:300;line-height:25px;}.css-1hvpcve em{font-style:italic;}.css-1hvpcve strong{font-weight:bold;}.css-1hvpcve a{font-weight:500;color:var(–color-content-secondary,#363636);}.css-1c013uz{margin-top:18px;margin-bottom:22px;}@media only screen and (max-width:480px){.css-1c013uz{font-size:14px;margin-top:15px;margin-bottom:20px;}}.css-1c013uz a{color:var(–color-signal-editorial,#326891);-webkit-text-decoration:underline;text-decoration:underline;font-weight:500;font-size:16px;}@media only screen and (max-width:480px){.css-1c013uz a{font-size:13px;}}.css-1c013uz a:hover{-webkit-text-decoration:none;text-decoration:none;}How Times reporters cover politics. We rely on our journalists to be independent observers. So while Times staff members may vote, they are not allowed to endorse or campaign for candidates or political causes. This includes participating in marches or rallies in support of a movement or giving money to, or raising money for, any political candidate or election cause.Learn more about our process.A fact sheet distributed late Monday by the Office of the United States Trade Representative said that the United States and Japan had promised to encourage higher labor and environmental standards for minerals that power electric vehicles. The parties also promised to promote more efficient use of resources and confer on how they review investments from foreign entities in the sector, among other pledges.In a call with reporters on Monday, a senior official said the Biden administration had consulted with Congress and received input from lawmakers. But the official said the administration had the authority to negotiate limited agreements without submitting them to Congress for approval.Katherine Tai, the United States trade representative, had been expected to sign the agreement on Tuesday.“It’s clear this agreement is one of convenience,” Mr. Neal and Mr. Wyden said in the statement. “As we warned Ambassador Tai last week, the administration does not have the authority to unilaterally enter into free trade agreements.”Administration officials have argued that key members of Congress always intended U.S. allies to be included in the law’s benefits. But other lawmakers have also criticized the Biden administration for sidestepping Congress’s authority over new trade deals, a tactic that the Trump administration also frequently used.In a statement on Tuesday, Representative Jason Smith, Republican of Missouri and the chairman of the Ways and Means Committee, said the agreement with Japan did not shift critical mineral supply chains from China.“Equally shameful is the fact that the Biden administration is distorting the plain text of U.S. law to write as many green corporate welfare checks as possible,” Mr. Smith said. “The administration has not been transparent with the American people and has ignored major concerns raised by Congress, including failing to provide an analysis of the effects this agreement would have on American workers.”Representative Dan Kildee, Democrat of Michigan, said on Tuesday that the administration was taking the wrong approach with the deal.“I believe the administration must come to Congress if they want to enter new free trade pacts,” he said in a statement. 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    U.S. and Europe Angle for New Deal to Resolve Climate Spat

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    American and European officials are trying to reach agreement on the outlines of a limited trade deal that could help resolve a major rift over America’s new climate legislation.WASHINGTON — American and European officials meeting in Washington this week are trying to agree on the outlines of a limited trade deal that would allow European companies to qualify for some of the benefits of the Biden administration’s new climate legislation, in a bid to assuage a major source of tension between the allies.The governments hope to announce their intention to begin negotiations over such an agreement as soon as Friday, when President Biden is set to meet with Ursula von der Leyen, the president of the European Commission, at the White House.American officials have also been carrying out similar conversations with the governments of Japan and the United Kingdom to see if some type of limited new agreement could be struck that would also offer Japanese and British companies certain benefits under the law.At the center of the debate is the Inflation Reduction Act, a $370 billion bill that President Biden signed last year to try to mitigate climate change by transforming U.S. power generation and the car industry. The bill offers generous tax credits to American consumers to purchase new and used electric vehicles, but it imposes tough restrictions on the types of vehicles that can benefit from these rules, in ways that disadvantage foreign carmakers.The law specifies that, to receive a tax credit, cars must be assembled in North America and source the material for their batteries from North America, or from countries with which the United States has a free-trade agreement. Despite close ties, the United States does not have a free-trade agreement with the European Union, Japan or the United Kingdom.The passage of the law has prompted harsh criticism from allies, who say companies in their countries will be penalized. European officials have been particularly outspoken, arguing that the bill comes at a delicate time for a European economy that is already contending with disruptions from the war in Ukraine and skyrocketing energy prices.The dispute has raised the prospect of a subsidy war between the United States and the European Union, and threatened to strain relations at a time when both sides are trying to maintain a united front against Russia.“I don’t think U.S. government officials anticipated this level of pushback and this level of disdain against this massive climate bill,” said Olga Khakova, the deputy director for European energy security at the Atlantic Council’s Global Energy Center. But she said emotions had now subsided a bit. “We are in this mode right now where we want to find a solution.”An electric Volkswagen at a factory in Germany. Despite close ties, the United States and the European Union do not have a free-trade agreement.Jens Schlueter/Agence France-Presse — Getty ImagesThe rift has set off a scramble within the U.S. government to try to scrape together some type of new trade deal that could be signed with allied governments to allow their companies to benefit from some of the law’s tax credits. With such an agreement, for example, a company based in the European Union could help to supply lithium, nickel or other battery materials for electric vehicles made in North America.A Treasury official said that any new trade agreements would be evaluated during a rule-making process to ensure that they comply with the critical mineral requirements in the legislation. The official pointed to Chinese control over critical mineral extraction as a reason for the need to make the supply chains of the United States and like-minded partners strong.A U.S. official said that the administration had been engaged in ongoing consultations with Congress, and that those briefings, and conversations with unions and private industry, would continue in the coming weeks.The Treasury Department, in a white paper published in December, said that the Inflation Reduction Act did not define the term “free trade agreement,” and that the Treasury secretary could identify additional free-trade agreements for the purposes of the critical-minerals requirement going forward.Treasury Secretary Janet L. Yellen said last month that the Biden administration was considering limited trade deals focused on critical minerals as a solution, and she suggested that these could be done without the approval of Congress. She emphasized that the intent of the law was not for the United States to steal jobs from Europe and that the law was meant to be aligned with the administration’s “friend-shoring” agenda..css-1v2n82w{max-width:600px;width:calc(100% – 40px);margin-top:20px;margin-bottom:25px;height:auto;margin-left:auto;margin-right:auto;font-family:nyt-franklin;color:var(–color-content-secondary,#363636);}@media only screen and (max-width:480px){.css-1v2n82w{margin-left:20px;margin-right:20px;}}@media only screen and (min-width:1024px){.css-1v2n82w{width:600px;}}.css-161d8zr{width:40px;margin-bottom:18px;text-align:left;margin-left:0;color:var(–color-content-primary,#121212);border:1px solid var(–color-content-primary,#121212);}@media only screen and (max-width:480px){.css-161d8zr{width:30px;margin-bottom:15px;}}.css-tjtq43{line-height:25px;}@media only screen and (max-width:480px){.css-tjtq43{line-height:24px;}}.css-x1k33h{font-family:nyt-cheltenham;font-size:19px;font-weight:700;line-height:25px;}.css-1hvpcve{font-size:17px;font-weight:300;line-height:25px;}.css-1hvpcve em{font-style:italic;}.css-1hvpcve strong{font-weight:bold;}.css-1hvpcve a{font-weight:500;color:var(–color-content-secondary,#363636);}.css-1c013uz{margin-top:18px;margin-bottom:22px;}@media only screen and (max-width:480px){.css-1c013uz{font-size:14px;margin-top:15px;margin-bottom:20px;}}.css-1c013uz a{color:var(–color-signal-editorial,#326891);-webkit-text-decoration:underline;text-decoration:underline;font-weight:500;font-size:16px;}@media only screen and (max-width:480px){.css-1c013uz a{font-size:13px;}}.css-1c013uz a:hover{-webkit-text-decoration:none;text-decoration:none;}How Times reporters cover politics. We rely on our journalists to be independent observers. So while Times staff members may vote, they are not allowed to endorse or campaign for candidates or political causes. This includes participating in marches or rallies in support of a movement or giving money to, or raising money for, any political candidate or election cause.Learn more about our process.“I think the word ‘free trade’ was meant to mean reliable friends and partners with whom we can feel we have secure supply chains,” Ms. Yellen said on the sidelines of the Group of 20 finance ministers meetings in India last month. “We’ve been very clear with Europe that this is not a subsidy war.”With input from the Office of the United States Trade Representative, officials from the Treasury Department have prepared a document spelling out what kind of deal would constitute a “free-trade agreement” for the purposes of the legislation, according to people familiar with the plans.It is not clear how quickly the solution could be completed, however, as the white paper said the Treasury Department and the Internal Revenue Service would seek public comment on “what criteria should be used to identify free-trade agreements for the purposes of the critical-minerals requirement.”In a briefing on Friday, a European official said Europe and the United States could announce by the end of this week a commitment to forge a new limited trade deal, most likely focused on supply chains for critical minerals. Unlike a traditional free-trade agreement, which entails reducing barriers to trade between partners, this agreement would not involve lowering tariffs on either side, and the parties would aim to flesh out the agreement in days or weeks, rather than months, the European official said.“I think the word ‘free trade’ was meant to mean reliable friends and partners with whom we can feel we have secure supply chains,” Treasury Secretary Janet L. Yellen said at the Group of 20 meeting last month.Aijaz Rahi/Associated PressThe official added that the agreement would need to be legally binding, and would still involve seeking some type of approval from European Union member states. In the United States, the agreement could come in the form of an executive order from the Biden administration, and without requiring the approval of Congress, the official suggested.One irony is that neither the European Union nor the United States is a major source of the critical minerals needed for electric vehicle batteries. But some officials have suggested that the partnership would form a foundation for a group that could be expanded over time to include countries with larger supplies of lithium, cobalt, nickel and other minerals.While analysts said a new deal with Europe could in practice satisfy the requirements of the law, it would not really resemble a free-trade agreement, as such agreements have come to be understood.Free-trade deals are legal agreements that the World Trade Organization defines as covering “substantially all trade” between countries, including a broad range of goods and, typically, services. They usually take years to negotiate and, in the United States, require the approval of Congress.Scott Lincicome, the director of general economics at the Cato Institute, said that the Biden administration’s authority to strike such trade pacts was questionable but that it was unlikely that anyone would try to mount a legal challenge to them.“Everyone in the room knows that this is not kosher, but there’s not really anything anybody can do about it,” Mr. Lincicome said.Political appetite for striking new free-trade deals has diminished in the United States in recent years, in part because of a perception that such pacts have helped multinational corporations move factories and jobs offshore.Efforts to strike expansive trade deals with Europe and a group of Asian countries during the Obama administration fizzled, in part because of that political opposition. During the Trump administration, the United States signed a series of limited trade deals with South Korea, Japan and China that were carried out through executive orders, not by congressional approval.Edward Alden, a senior fellow at the Council on Foreign Relations, said that the limited deal would mollify the Europeans, and that U.S.-E.U. economic relations were too important “to not allow the Europeans under the tent in some way or another.” But it could escalate complaints from other trading partners, like South Korea, that don’t feel as though their concerns have been taken care of, he said.South Korea already has a comprehensive free-trade agreement with the United States, but it has other criticisms of the climate law, centering on how the current terms exclude electric vehicles made by Hyundai from receiving tax credits. “Once you make accommodations for one, the pressure grows to make accommodations for others,” he said.It remains unclear how Congress will respond. Lawmakers have expressed concerns that the administration is not adhering to the law’s original intent of promoting U.S. manufacturing. Many also disapprove of efforts by the executive branch to bypass congressional authority in approving trade deals.But Democrats may also be sympathetic to the effort to smooth over relations with Europeans, and reluctant to reopen debate over their signature climate legislation. And at least one key lawmaker, Senator Joe Manchin III, Democrat of West Virginia, has said he didn’t realize that the European Union lacked a free-trade agreement with the United States in the first place.Still, the dispute has elicited some criticism that American officials are going to great lengths to mollify Europeans, especially given that the European Union imposes some trade barriers on the United States, like a relatively high tariff on imported U.S. cars.John G. Murphy, the senior vice president for international policy at the U.S. Chamber of Commerce, said it was his group’s view that the Biden administration should fight against various E.U. policies that discriminate against American companies “with the same doggedness European officials have brought to their complaints about the I.R.A.” More

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    Ford Follows Tesla in Cutting Electric Vehicle Prices

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    The automaker reduced the price of the Mustang Mach-E by up to $5,900 after Tesla slashed prices of its cars by as much as 20 percent.Ford Motor said on Monday that it was cutting prices on its top-selling battery-powered model, the Mustang Mach-E, and increasing production of the sport utility vehicle. It was the latest sign of intensifying competition in the electric car market.Two weeks ago, Tesla slashed prices of its electric cars by as much as 20 percent in response to softening demand around the world.The price cuts for the two most affordable versions of the Mach-E amounted to less than $1,000 each. Other models, with longer-range batteries and premium options, were reduced $3,680 to $5,900, reductions of 6 percent to 9 percent.“We want to make E.V.s more accessible, so we’re increasing production and reducing prices across the Mach-E lineup,” Ford’s chief executive, Jim Farley, said on Twitter. He added that “with higher production, we’re reducing costs, which allows us to share these savings with customers.”The lowest-priced Mustang Mach-E — a rear-wheel-drive model with a standard battery — now has a list price of $45,995, a reduction of $900. The high-performance Mach-E GT with an extended-range battery now sells for $63,995, a cut of $5,900.Tesla’s least expensive car is the Model 3, which is smaller than the Mustang Mach-E and starts at $43,990. The all-wheel-drive Model Y, a more direct competitor of the electric Mustang, starts at $53,490. An all-wheel-drive Mustang Mach-E with comparable battery range now lists for $53,995.Electric vehicles priced below $55,000 can qualify for federal tax credits of $7,500 that were made available starting Jan. 1 under the Inflation Reduction Act. Ford’s price cuts will make more versions of the Mach-E eligible for the credit.Ford said the new prices would automatically apply to customers who had placed orders and were waiting for their cars. Ford’s credit division is also offering subsidized interest rates as low as 5.34 percent on Mach E orders placed between Jan. 30 and April 3.Tesla has long dominated the electric car market, which it largely had to itself until the last couple of years, but is increasingly encountering stiff competition. Its rate of growth has slowed in China, where its is now outsold by a local manufacturer, BYD. In addition to Ford, Volkswagen, Hyundai, Kia and other automakers have introduced electric models in the United States that are selling well and are generally cheaper than Tesla’s luxury models.In 2022, Ford sold just under 40,000 Mach-Es, about 45 percent more than in 2021. That made the Mach-E the third-best-selling electric model after Tesla’s Model Y and Model 3.For much of the last two years, Tesla, Ford and other automakers raised prices of electric vehicles because demand for battery-powered cars far outstripped supply. But demand for cars and other big-ticket goods has weakened in recent months as the Federal Reserve has raised interest rates significantly. Fed policymakers are expected to slow their rate increases at their first meeting of the year on Wednesday. More

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    Climate Change May Bring New Era of Trade Wars, as E.U. and U.S. Spar

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    Countries are pursuing new solutions to try to mitigate climate change. More trade fights are likely to come hand in hand.WASHINGTON — Efforts to mitigate climate change are prompting countries across the world to embrace dramatically different policies toward industry and trade, bringing governments into conflict.These new clashes over climate policy are straining international alliances and the global trading system, hinting at a future in which policies aimed at staving off environmental catastrophe could also result in more frequent cross-border trade wars.In recent months, the United States and Europe have proposed or introduced subsidies, tariffs and other policies aimed at speeding the green energy transition. Proponents of the measures say governments must move aggressively to expand sources of cleaner energy and penalize the biggest emitters of planet-warming gases if they hope to avert a global climate disaster.But critics say these policies often put foreign countries and companies at a disadvantage, as governments subsidize their own industries or charge new tariffs on foreign products. The policies depart from a decades-long status quo in trade, in which the United States and Europe often joined forces through the World Trade Organization to try to knock down trade barriers and encourage countries to treat one another’s products more equally to boost global commerce.Now, new policies are pitting close allies against one another and widening fractures in an already fragile system of global trade governance, as countries try to contend with the existential challenge of climate change.“The climate crisis requires economic transformation at a scale and speed humanity has never attempted in our 5,000 years of written history,” said Todd N. Tucker, the director of industrial policy and trade at the Roosevelt Institute, who is an advocate for some of the measures. “Unsurprisingly, a task of this magnitude will require a new policy tool kit.”The current system of global trade funnels tens of millions of shipping containers stuffed with couches, clothing and car parts from foreign factories to the United States each year, often at astonishingly low prices. But the prices that consumers pay for these goods do not take into account the environmental harm generated by the far-off factories that make them, or by the container ships and cargo planes that carry them across the ocean.A factory in Chengde, China. U.S. officials believe they must lessen a dangerous dependence on goods from China.Fred Dufour/Agence France-Presse — Getty ImagesAmerican and European officials argue that more needs to be done to discourage trade in products made with more pollution or carbon emissions. And U.S. officials believe they must lessen a dangerous dependence on China in particular for the materials needed to power the green energy transition, like solar panels and electric vehicle batteries.The Biden administration is putting in place generous subsidies to encourage the production of clean energy technology in the United States, such as tax credits for consumers who buy American-made clean cars and companies building new plants for solar and wind power equipment. Both the United States and Europe are introducing taxes and tariffs aimed at encouraging less environmentally harmful ways of producing goods.Biden administration officials have expressed hopes that the climate transition could be a new opportunity for cooperation with allies. But so far, their initiatives seem to have mainly stirred controversy when the United States is already under attack for its response to recent trade rulings.The administration has publicly flouted several decisions of World Trade Organization panels that ruled against the United States in trade disputes involving national security issues. In two separate announcements in December, the Office of the United States Trade Representative said it would not change its policies to abide by W.T.O. decisions.But the biggest source of contention has been new tax credits for clean energy equipment and vehicles made in North America that were part of a sweeping climate and health policy bill that President Biden signed into law last year. European officials have called the measure a “job killer” and expressed fears they will lose out to the United States on new investments in batteries, green hydrogen, steel and other industries. In response, European Union officials began outlining their own plan this month to subsidize green energy industries — a move that critics fear will plunge the world into a costly and inefficient “subsidy war.”The United States and European Union have been searching for changes that could be made to mollify both sides before the U.S. tax-credit rules are settled in March. But the Biden administration appears to have only limited ability to change some of the law’s provisions. Members of Congress say they intentionally worded the law to benefit American manufacturing.Biden administration is putting in place subsidies to encourage the production of clean energy technology in the United States, such as tax credits for consumers who buy American-made clean cars.Brittany Greeson for The New York TimesEuropean officials have suggested that they could bring a trade case at the World Trade Organization that might be a prelude to imposing tariffs on American products in retaliation.Valdis Dombrovskis, the European commissioner for trade, said that the European Union was committed to finding solutions but that negotiations needed to make progress or the European Union would face “even stronger calls” to respond.“We need to follow the same rules of the game,” he said.Anne Krueger, a former official at the International Monetary Fund and World Bank, said the potential pain of American subsidies on Japan, South Korea and allies in Europe was “enormous.”“When you discriminate in favor of American companies and against the rest of the world, you’re hurting yourself and hurting others at the same time,” said Ms. Krueger, now a senior fellow at the School of Advanced International Studies at Johns Hopkins University.But in a letter last week, a collection of prominent labor unions and environmental groups urged Mr. Biden to move forward with the plans without delays, saying outdated trade rules should not be used to undermine support for a new clean energy economy.“It’s time to end this circular firing squad where countries threaten and, if successful, weaken or repeal one another’s climate measures through trade and investment agreements,” said Melinda St. Louis, the director of the Global Trade Watch for Public Citizen, one of the groups behind the letter.Valdis Dombrovskis, the European commissioner for trade, has pressed the United States to negotiate more on its climate-related subsidies for American manufacturing.Stephanie Lecocq/EPA, via ShutterstockOther recent climate policies have also spurred controversy. In mid-December, the European Union took a major step toward a new climate-focused trade policy as it reached a preliminary agreement to impose a new carbon tariff on certain imports. The so-called carbon border adjustment mechanism would apply to products from all countries that failed to take strict actions to cut their greenhouse gas emissions.The move is aimed at ensuring that European companies that must follow strict environmental regulations are not put at a disadvantage to competitors in countries where laxer environmental rules allow companies to produce and sell goods more cheaply. While European officials argue that their policy complies with global trade rules in a way that U.S. clean energy subsidies do not, it has still rankled countries like China and Turkey.The Biden administration has also been trying to create an international group that would impose tariffs on steel and aluminum from countries with laxer environmental policies. In December, it sent the European Union a brief initial proposal for such a trade arrangement.The idea still has a long way to go to be realized. But even as it would break new ground in addressing climate change, the approach may also end up aggravating allies like Canada, Mexico, Brazil and South Korea, which together provided more than half of America’s foreign steel last year.Under the initial proposal, these countries would theoretically have to produce steel as cleanly as the United States and Europe, or face tariffs on their products.A steel plant in Belgium. Under the initial proposal, countries would theoretically have to produce steel as cleanly as the United States and Europe, or face tariffs.Kevin Faingnaert for The New York TimesProponents of new climate-focused trade measures say discriminating against foreign products, and goods made with greater carbon emissions, is exactly what governments need to build up clean energy industries and address climate change.“You really do need to rethink some of the fundamentals of the system,” said Ilana Solomon, an independent trade consultant who previously worked with the Sierra Club.Ms. Solomon and others have proposed a “climate peace clause,” under which governments would commit to refrain from using the World Trade Organization and other trade agreements to challenge one another’s climate policies for 10 years.“The complete legitimacy of the global trading system has never been more in question,” she said.In the United States, support appears to be growing among both Republicans and Democrats for more nationalist policies that would encourage domestic production and discourage imports of dirtier goods — but that would also most likely violate World Trade Organization rules.Most Republicans do not support the idea of a national price on carbon. But they have shown more willingness to raise tariffs on foreign products that are made in environmentally damaging ways, which they see as a way to protect American jobs from foreign competition.Robert E. Lighthizer, a chief trade negotiator for the Trump administration, said there was “great overlap” between Republicans and Democrats on the idea of using trade tools to discourage imports of polluting products from abroad.“I’m coming at it to get more American employed and with higher wages,” he said. “You shouldn’t be able to get an economic advantage over some guy working in Detroit, trying to support his family, from pollution, by manufacturing overseas.” More

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    Supply Problems Hurt Auto Sales in 2022. Now Demand Is Weakening.

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    A global semiconductor shortage is easing, which could allow carmakers to lift production this year. But higher interest rates could keep sales low.Last year, sales of new cars and trucks fell to their lowest level in a decade because automakers could not make enough vehicles for consumers to buy. This year, sales are likely to remain soft, but for an entirely different reason — weakening demand.The Federal Reserve’s interest rate increases, which are intended to slow inflation, have made it harder and more expensive for consumers to finance automobile purchases, after prices had already risen to record highs.Analysts expect that higher rates and a slowing economy will force some U.S. shoppers to delay car purchases or steer away from showrooms altogether in 2023 even if automakers crank out more vehicles than they did last year because they can get more parts.“For over a decade, low interest rates have helped people buy the big cars that Americans like,” said Jessica Caldwell, executive director of insights at Edmunds, a market research firm. “Low rates from the Fed are what made those attractive offers for zero-percent financing and 72-month loans possible, but with the higher rates, it’s a pretty unfriendly market for people buying a car.”Edmunds estimates that automakers will sell 14.8 million cars and trucks in the United States this year, which would be well below the sales that automakers became accustomed to in the previous decade.Inflation F.A.Q.Card 1 of 5What is inflation? More

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    Which Electric Vehicles Qualify for Federal Tax Credits?

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    Here is a partial list of electric and plug-in hybrid vehicles that will qualify for federal tax credits in 2023.The Treasury Department on Thursday published a partial list of new electric and plug-in hybrid cars that will qualify for tax credits of up to $7,500. The list is expected to be updated over the coming days and weeks.The credits will apply to sedans that cost no more than $55,000 and sport utility vehicles and pickup trucks that cost up to $80,000. In addition, only buyers who earn less than $150,000 a year as an individual or $300,000 a year as a couple can claim the credits.The list could change in March, when new rules take effect that require automakers to use battery raw materials and components from North America or a trade ally. Those rules are still being formulated, and it’s not clear exactly when they will start to apply.Here are the cars on the list, by automaker:AudiQ5 TFSI e Quattro plug-in hybridFord MotorFord Escape Plug-in HybridFord E-TransitFord F-150 LightningFord Mustang Mach-ELincoln Aviator Grand Touring plug-in hybridLincoln Corsair Grand Touring plug-in hybridNissanLeafRivianR1TR1SStellantisChrysler Pacifica plug-in hybridJeep Wrangler 4xe plug-in hybridJeep Grand Cherokee 4xe plug-in hybridTeslaModel 3Model YVolkswagenID.4VolvoVolvo S60 plug-in hybrid More