British media: US and Europe failed to reach a trade agreement on key battery minerals

Global Times special correspondent Ren Zhong: The European Union has failed to reach a trade agreement with the United States on key battery minerals. On January 31st, Reuters reported that the EU's top trade official stated that due to the EU's belief that the US Inflation Reduction Act unfairly discriminates against foreign suppliers, the two sides were unable to reach an agreement at the fifth ministerial meeting of the US EU Trade and Technology Commission held in Washington, D.C. on January 30th.

The key issue of this meeting is whether the preferential policies of the US Inflation Reduction Act can be applied to battery mineral materials mined or processed within the EU. On January 30th, Political News Network reported that the Executive Vice Chairman of the European Commission, Dong Browski, had put pressure on this. Previously, the European Union accused the electric vehicle subsidy provisions in the Inflation Reduction Act passed by the US Congress in 2022 of violating international trade rules and unfairly discriminating against foreign suppliers. European Commission President von der Leyen once said that some aspects of the bill would unfairly help American companies.

The Inflation Reduction Act requires electric vehicles to be produced in the United States in order to receive consumer tax credits, and imposes additional domestic procurement requirements on key minerals needed to manufacture electric vehicle batteries. The Wall Street Journal reported that vehicles must meet a series of requirements to qualify for a full tax credit of $7500. One regulation is that 40% of the total mineral value in automotive batteries must come from the United States or countries with free trade agreements with the United States. Over time, this proportion will gradually increase and reach 80% by 2026. The EU has not signed a free trade agreement with the United States, which has made them dissatisfied with the subsidy methods of the bill. In this context, officials from the United States and the European Union are discussing the establishment of a new mining club to strengthen cooperation in the procurement of minerals used in clean energy technologies, reduce dependence on China, and repair cracks caused by US electric vehicle subsidies.

Bloomberg reported that East Browski had stated that if the agreement between the United States and the European Union was consistent with the agreement signed between the United States and Japan in March last year, then the EU and the United States "have now signed", and the difficulty lies in the fact that the requirements put forward by the United States to the EU are more stringent than those put forward by Japan.

After the fifth ministerial meeting of the US EU Trade and Technology Commission, no joint statement was issued by the two sides. Reuters reported that both sides have agreed to hold their sixth ministerial meeting in Belgium in April this year, which is expected to be the last meeting before the national elections of the European Union and the United States this year.