After having been on the rise throughout 2022 the popularity and demand for EVs do not look like going down anytime soon. Just like security issues, collaborations, wars, politics, etc. have seen countries strike up deals A deal has been reached for Vital Minerals for EV Batteries between the US and Japan showing just how important they are becoming to the future by each passing day.

To reduce reliance on China for strategically important resources and to diversify supply chains US and Japan have struck a deal that will see them trade critical minerals for EV batteries.

The deal took place on Tuesday, 28th March 2023. This move will now see metals processed in Japan qualify for tax incentives under the Inflation Reduction Act imposed in the US by President Joe Biden.

US Trade Representative Katherine Tai commented “This announcement is proof of President Biden’s commitment to building resilient and secure supply chains. The US would continue to work with our allies and partners to strengthen supply chains for critical minerals, including through the Inflation Reduction Act.”

The Inflation Reduction Act came into force in August 2022. This would require them to get a portion of critical minerals used in EV batteries to be mined in or to be processed domestically from countries with whom the US has a free trade agreement. This deal will now see the two countries not imposing an export duty on the trade of stuff like nickel, graphite, manganese, lithium, and cobalt.

Earlier Japan as well as European countries protested when they were excluded from joining the American clean vehicle credit program under the law, however, Japan must now have forgotten about it.

The ambassador to the U.S., Koji Tomita and U.S. Trade Representative Katherine Tai signed the deal in Washington. And therefore a deal has been reached for Vital Minerals for EV Batteries between the US and Japan.

Also Read: J&K’s recently found Lithium Reserve can help India become the Number One EV Manufacturer says Nitin Gadkari

Japan and the US don’t have an FTA but this deal will treat Japan as one of the FTA partners of the US when it comes to certain strategically important minerals. This move will also work wonders for Japanese automaker companies like Panasonic which happens to be one of the biggest battery makers.

Foreign Minister Yoshimasa Hayashi shared, “As we expect a significant increase of demand for EV batteries going forward, securing critical minerals indispensable for their production is a pressing task. The deal is aimed at establishing resilient supply chains through cooperation between Japan and the United States, as well as like-minded countries, by strengthening cooperation to secure sustainable and fair supply chains for those critical minerals.”

The US government is not just looking for a stable and secure supply of materials needed for EV batteries but also for materials needed for heat pumps and large-capacity batteries for the electric grid.

Source: USTR


Elliot is a passionate environmentalist and blogger who has dedicated his life to spreading awareness about conservation, green energy, and renewable energy. With a background in environmental science, he has a deep understanding of the issues facing our planet and is committed to educating others on how they can make a difference.

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