The U.S. struck a trade deal with Japan that aims to allow Japanese cars to qualify for a new electric vehicle tax credit and push China out of their critical mineral supply chains. But it’s not clear if Japanese automakers can shake off China in time to meet its increasingly strict sourcing rules.
And top trade and tax leaders in Congress, who passed the subsidy in last year’s climate spending package with the goal of loosening China’s control of electric vehicle critical minerals while shifting the supply chain to U.S. and friendly countries, argue the agreement has no teeth.
“It’s clear this agreement is one of convenience,” House Ways and Means Committee ranking member Richard E. Neal, D-Massachusetts, and Senate Finance Chair Ron Wyden, D-Oregon, said in a statement. “Even among allies, the United States should only enter into agreements that account for the realities of an industry, learn from past agreements, and raise standards.”
