State Dept. Official Said He Got an Earful From Korea, Japan on IRA
Undersecretary of State for Economic Growth, Energy, and the Environment Jose Fernandez told a think tank audience Jan. 24 that he had "very productive conversations" with business and government officials in South Korea and Japan on the Inflation Reduction Act.
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"The first thing I said is: We take your concerns seriously, and we are going to continue talking about them and look for ways to ameliorate them," Fernandez said at a Center for Strategic and International Studies event.
He said he pointed to what Treasury has done to allay some of the concerns, such as making clear that leased vehicles count as commercial vehicles, and therefore don't have to meet all the North American content requirements that cars sold directly to consumers do. Fernandez said at least a quarter of passenger vehicles sold in the U.S. are either leased from a dealer or part of other commercial fleets.
Fernandez said he reminded the Koreans that the U.S. expects 75% of electric vehicle batteries will come from South Korea by 2025.
But even as he defended the IRA as the U.S. putting its money where its mouth is on the green transition, he acknowledged that countries in Asia and Europe still have concerns about what they "believe are the unfair consequences."
"We're trying to see what can be done within the law to allay some of these concerns," he said.
Many of the planks of the IRA that allies are objecting to were designed by Sen. Joe Manchin, D-W.Va., who said he did not want the U.S. to be dependent on China for the critical inputs for EVs or other green transition technologies.
Fernandez was asked about the fact that China controls the majority of critical minerals now, either through ownership of mines abroad, through processing, or through domestic mining. He said there are 12 countries in a Critical Minerals Partnership with the U.S., and a 13th will be joining soon. He said the countries will share information about potential mining or recycling facility investments, will share financing opportunities, and will engage their private sectors.
"We’ve got a problem. For us to reach our clean energy future, we’re going to need 42 times the amount of lithium we use today," Fernandez said, and at least three times the total amount of critical minerals. "We cannot depend on a single source for anything," he said, referring to China's dominance in the sector.