Washington Insider-- Wednesday

The Push for Electric Vehicles

Here's a quick monitor of Washington farm and trade policy issues from DTN's well-placed observer.

Bilaterals Marked First Day Of US-Mexico-Canada Agreement Confab

U.S. Trade Representative Katherine Tai met with both Canadian Minister of Small Business, Export Promotion and International Trade Mary Ng and Mexican Secretary of Economy Tatiana Clouthier on the first day of two days of meetings under the Free Trade Commission established under the U.S.-Mexico-Canada Agreement (USMCA).

With Ng, Tai pressed on issues relative to Canada "fully meeting its USMCA commitments, including its allocation of dairy tariff-rate quotas and home-shopping." The Trump administration brought the dairy case in late 2020 and Tai has said she will seek to use negotiation with Canada to move the issue forward. Ambassador Tai also expressed concern about Canada's recently proposed digital service tax, according to a readout of the session from the Office of the U.S. Trade Representative (USTR).

"They also discussed softwood lumber and WTO reform," the statement said. However, the dairy issue was not mentioned in a similar readout of the session released by Canada, with Ng raising issues with Tai on the U.S. Buy American effort.

With Clouthier, Tai raised several "ongoing issues," the readout of their session said, including "science- and risk-based regulatory approaches in agriculture; access for U.S. fresh potatoes to all of Mexico; an immediate resumption of authorizations of agricultural biotechnology products in Mexico; an energy policy that respects U.S. investment and is consistent with efforts to tackle climate change; and enhanced trade facilitation efforts."

Mexico's labor situation was also an issue broached along with U.S. investigations into Mexican agricultural products, according to a recap from Mexico.

Antitrust Push On Beef Packers

Lawmakers and attorneys general from several states are pushing the Department of Justice (DOJ) to continue their investigation the four largest meatpackers in the U.S. In a letter to Attorney General Merrick Garland, a bipartisan group of House and Senate members called on DOJ to continue the investigation of "improper and anticompetitive activities in the live cattle and beef industry" that was launched one year ago.

They cited a lack of information from the investigation, noting "there is no information to even suggest whether the investigation has concluded or is still ongoing."

They called for the continuation of the investigation and requested an update on the situation.

Cattle producers and small producers in particular are continuing to see difficult conditions, the lawmakers said. "It is critically important that producers have fair and transparent markets for the commodities they produce," the letter stated. "We urge the DOJ Antitrust Division to continue vigilance and where possible, provide updates of findings."

Washington Insider: The Push for Electric Vehicles

A key part of the climate goals by the Biden administration is reducing and eventually eliminating vehicle emissions. That is part of a $174 billion push to put more electric vehicles on U.S. roads by the Biden administration.

President Joe Biden traveled to Dearborn, Mich., to see firsthand the new Ford F-150 picking that is electric powered, not using an internal combustion engine. But even that push by Ford drew some comments by Biden about the prospects that EVs could be built in other countries and brought back into the U.S.

"We need automakers and other companies to keep investing here in America and not take the benefits of our public investments and expand electric vehicles and battery manufacturing abroad," Biden said, a reference to Ford rival General Motors announcing plants to make a $1 billion investment in building EVs in Mexico and Ford opting to build some EVs in Mexico versus Ohio.

But even as Biden got to drive the F-150 that will formally be unveiled on Wednesday, it was still camouflaged so that no one could get an early peek at the new truck.

Rather than using consumer incentives for high-priced vehicles, Reuters reported that the White House wants to use government spending "to prod Americans to buy electric vehicles."

Rebates and tax credits are the usual routes used to financially encourage consumers to buy something like an EV that can be more expensive than a traditionally gasoline-power vehicle.

But there are consumer rebates involved in the push for them to purchase EVs -- $100 billion of the $174 billion effort is for such rebates. More spending on battery facilities and technologies is also planned as a way to bring the cost of the EVs down.

There has been a $7,500 tax credit for the purchase of EVs, but White House Climate Adviser Gina McCarthy told Bloomberg TV that Biden is looking to "actually provide consumer rebates at the point of sale." She argues that will make it more likely that lower or middle-income Americans might be able to afford the vehicles.

One of the keys for EVs, however, is charging stations. There are currently less than 100,000 of them in the U.S., and few if any in more remote areas of the country. And the cost of putting those charging stations in place will be a key one with the administration wanting Congress to approve funding to put 500,000 of them in place.

But many point out even that many charging stations will not be enough to meet an aggressive push for EVs.

The other issues for EVs that consumers will need to be convinced of will include their range. Currently, there is about a 250-mile range for EVs, a range that works fairly well for urban settings. But that may temper interest in areas where consumers have to drive for distances to get even basic services.

The recharging time will also be important even if there are more charging stations available.

And for those in northern climates, there is the issue of winter travel. Currently, internal combustion engines provide heat to keep vehicle passengers warm. In EVs, providing heat takes extra battery power and reduces the travel range.

By putting an EV pickup together in the form of the best-selling F-150, Ford is clearly trying to woo what may well be one of the more difficult-to-convince customers: Farmers. They rely on vehicles and at times need to travel at a moment's notice. And having to charge a vehicle first or fully to do that could be a major hurdle.

But those championing EVs contend there will be better and better battery technology ahead that will address these issues. But then the same argument was made on cellulosic ethanol which has failed to reach that key "commercially viable" stage.

And then there is the matter of replacing gasoline-powered vehicles, something which means less ethanol being used. And that is raising more than a few concerns with farmers who have helped in the push for ethanol over the years.

So we will see. EVs are clearly going to be in the U.S. vehicle mix ahead and will increase in numbers and use. But the broad deployment of those vehicles is coming. And with that will come challenges and opportunities, matters which agriculture will need to monitor closely, Washington Insider believes.

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