Despite Differences, EU Trade Chief is Determined to Continue US Battery Minerals Discussions

By Better Today On Jan 30, 2024

TL/DR –

The US and the European Union failed to finalize a trade deal for critical battery minerals, with outstanding issues including aspects of the US’s green energy subsidy law that the EU perceives as discriminatory. The agreement would have allowed European companies to benefit from US tax credits for electric vehicles. Despite the impasse, both sides plan to continue discussions to establish a transatlantic marketplace for minerals and other components, potentially contributing to resilient supply chains and the greening of their economies.

U.S. and EU Continue Talks Despite Failure to Secure Battery Minerals Trade Deal

On Tuesday, the U.S. and European Union (EU) could not finalize a significant trade deal for critical battery minerals. Despite the setback, both parties remain committed to establishing a transatlantic marketplace for minerals and other elements, stated the EU’s top trade officer.

According to European Commission Vice President Valdis Dombrovskis, “outstanding issues” on the European side prevented the deal. They relate to parts of the U.S. green energy subsidy law, the Inflation Reduction Act, deemed discriminatory by the EU. This trade agreement would allow European businesses to leverage substantial U.S. tax credits for electric vehicles (EVs).

Without setting specific targets or deadlines, Dombrovskis emphasized the importance of the deal for both their resilient supply chains and green economy initiatives. He expressed hope for continued engagement and ultimately a comprehensive agreement.

No joint statement followed the Trade and Technology Council meeting, a platform launched in 2021 to enhance cooperation on semiconductor supply chains, curb China’s non-market trade practices, and regulate big tech companies. The sides agreed to convene a sixth ministerial meeting in Belgium in April, likely the final one before forthcoming EU and U.S. national elections.

In March 2023, the U.S. and EU plan to launch discussions on the battery minerals trade, amid fears that the Inflation Reduction Act, incentivizing U.S. clean energy projects with tax credits, could divert initiatives from Europe. The U.S. promptly secured a minerals agreement with Japan last March.

A request for comment from the U.S. Trade Representative’s office has yet to receive a response.