Policy · Critical minerals / EV batteries
U.S. and Japan sign critical minerals agreement aimed at EV battery supply chains
- From
- Government of Japan (Tokyo)
- Covers
- U.S. government (USTR), Washington, D.C.
- Value
- Not disclosed
- Status
- Signed and entered into force on March 28, 2023.
- Date
- 2023-03-28
U.S. Trade Representative Katherine Tai and Japanese Ambassador Koji Tomita signed an agreement on strengthening critical minerals supply chains, which took effect on signature. Both sides committed not to impose export duties on EV battery minerals, to coordinate on non-market practices and investment screening, and to uphold labor standards. The deal builds on the 2019 U.S.-Japan Trade Agreement.
Why it matters
The agreement was designed to let Japan be treated like a free-trade partner for the critical-minerals requirement of the Inflation Reduction Act's clean vehicle tax credit, which mattered to Japanese automakers and battery makers expanding US production. That benefit largely lapsed when the 2025 budget law ended the credit for vehicles acquired after September 30, 2025.
What it covers
The agreement covers five battery minerals: cobalt, graphite, lithium, manganese and nickel. Besides no export duties, the two sides agreed to consult on how they screen foreign investment in mining and to discourage imports of minerals made with forced labor.
The controversy
The administration treated the deal as a free trade agreement for the $7,500 EV tax credit, which needs minerals from the US or a free-trade partner. Some members of Congress objected that it was signed without congressional approval and had weak labor and environmental rules. Japanese automaker groups supported it.
Sources
Kakehashi M&A News home
