Materials and Semiconductors: USA and Canada Deepen Cooperation

by | 28. Mar 2023 - 15:44 | Politics

Funding announced to build North American supply chains.

The USA wants to become less dependent on raw material imports from China – an important partner in this is neighboring Canada, which is rich in mineral resources and the mining industry. Now, cooperation is to be intensified, with the goal of joint supply chains for critical minerals needed for green tech and semiconductors as well as for aerospace and defense. U.S. President Joe Biden and Canada’s Prime Minister Justin Trudeau made the announcement at a meeting in Ottawa. To strengthen the mining, processing and recycling of raw materials such as rare earths in both countries, the governments plan to provide funding.

The U.S. already announced $250 million in funding last year for both domestic and Canadian companies in the sector. Those selected are to be announced this spring. The funding is provided under the Defense Production Act, a Cold War-era law that can require companies to accept and prioritize contracts deemed necessary for national defense (we reported). The Canadian government is providing the equivalent of about $1 billion each from the Critical Minerals Infrastructure Fund and the Strategic Innovation Fund.

Closer cooperation also in semiconductors

Under the US CHIPS and Science Act, the neighboring countries are also planning a cross-border development and manufacturing corridor for semiconductors. For this project, the United States wants to invest an additional $50 million under the Defense Production Act, and Canada up to the equivalent of $182 million from the Strategic Innovation Fund. The U.S. IT company IBM has already announced an expansion of its plant in Bromont, Canada, the two heads of government said.

Photo: iStock/BellPhotography423

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