Subsidies to be extended to countries with newly negotiated trade agreements on critical minerals.
Electric car subsidies under the Inflation Reduction Act (IRA) could be extended to more countries outside the US. New guidelines from the U.S. Treasury Department include a $3,750 tax credit for electric vehicles whose batteries contain 40 percent of raw materials mined or processed in Japan and possibly the EU. Initially, this was only planned if the critical minerals came from the U.S. or a country linked by a free trade agreement, such as Canada.
The new guidelines now propose to include newly negotiated trade agreements on critical minerals. An agreement to that effect was reached by the United States and Japan just last week, as we reported. A similar agreement is being sought with the EU. The Inflation Reduction Act sparked conflict between the transatlantic partners as EU politicians accused the United States of protectionism and distortion of competition.
The new rules are due to be implemented on April 18.
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