The newly signed MoU bars both the countries from unleashing bilateral export ban or restrictions on the EV battery’s important minerals
The east Asian nation Japan and the US has signed an agreement on trade on electric vehicles battery minerals. The agreement is an imperative strategy to boost the EV battery supply chains and reduce dependence on China for more important resources. On the other hand, it will help Japanese automobile manufacturers to to have a larger access to the newly unleashed $7,500 U.S. EV tax credit.
According to an unnamed official from the Biden government, the newly signed MoU bars both the countries from unleashing bilateral export ban or restrictions on the EV battery’s important minerals, which include lithium, nickel, cobalt, graphite and manganese. The agreement, apart from reducing the reliance for both countries on such minerals and other resources, needs cooperation to fight against "non-market policies and practices of other countries in the sector and on conducting investment reviews of foreign investments in their critical minerals supply chains,” claims Reuters exclusively.
Back in 2022, the US government has introduced climate-focused Inflation Reduction Act and the trade agreement on minerals is an imperative step that the US government aims to offer a wider access to the $7,500 per vehicle EV tax credit for the trusted allies. After Japan, the Biden administration wants to have another MoU on the same with the EU nations.
Additionally, both Japan and the US decided not to impose any kind of export duties on trade in important EV battery minerals such as lithium, cobalt, manganese, nickel and graphite. Both the countries are also looking forward to expanding their in-house manufacturing units in such resources and also increasing the supply networks volume. In an interview with Fortune, U.S. Trade Representative Katherine Tai said, "The US would continue to work with our allies and partners to strengthen supply chains for critical minerals, including through the Inflation Reduction Act."
