Energy & Environment

US, Japan reach trade deal for electric vehicles 

Employees work in the battery assembly hall at the BMW Spartanburg plant in Greer, S.C. Wednesday, Oct. 19, 2022. BMW’s sprawling factory near Spartanburg, will get a $1 billion investment, and the German automaker will spend another $700 million to build a battery plant nearby as it begins the transition to electric vehicles in the U.S., the company announced Tuesday, Oct. 18. (AP Photo/Sean Rayford)

The U.S. and Japan have reached a trade agreement related to batteries used in electric vehicle minerals. 

Under the agreement the countries won’t impose export tariffs upon each other.

The deal comes after the Inflation Reduction Act limits consumer tax credits for electric vehicles to cars where the batteries are mined or processed in countries where the U.S. has a free trade agreement. 

Countries including Japan have raised concerns about the provision, saying that it could curtail electric vehicle investments from automakers based in the country. 

The Biden administration has delayed the implantation of such restrictions on the credit, which aren’t expected to take effect until it releases guidance on them this month. The guidance is expected this week. 

In a statement, U.S. Trade Representative Katherine Tai said that the deal is “proof of President Biden’s commitment to building resilient and secure supply chains.” 

“This is a welcome moment as the United States continues to work with our allies and partners to strengthen supply chains for critical minerals, including through the Inflation Reduction Act,” Tai said. 

Tags Joe Biden Katherine Tai

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