Axios Pro Exclusive Content

Dems say no to Indonesian nickel

Oct 25, 2023
Sen. Tina Smith

Smith speaks in May. Photo: Stephen Maturen/Getty Images for Just Majority

Senate Democrats really don't want the Biden administration to strike a minerals trade deal with Indonesia.

Why it matters: Such a deal with Indonesia could help more EVs qualify for the IRA's consumer tax credit — but would create a potential political quagmire over fair trade and human rights.

Catch up quick: The IRA included a requirement in the 30D EV consumer credit that cars could qualify only if they used batteries with a certain amount of minerals from countries with U.S. free trade agreements.

Driving the news: Nine senators, led by Tina Smith, wrote Biden officials late Tuesday listing "several concerns" about the potential for a minerals FTA, which the Indonesian government is reportedly seeking.

  • Signatories to the letter included Energy and Natural Resources Chairman Joe Manchin and swing-state Democrats, including John Fetterman, Sherrod Brown and Tammy Baldwin, along with Republicans Kevin Cramer, Lisa Murkowski and Bill Cassidy.
  • Along with various environmental and humanitarian concerns, such an agreement "without the involvement of Congress" would "undermine the intent" of the legislative body, lawmakers wrote.
  • "Given the extraordinary taxpayer resources at play, we strongly believe that eligibility for the critical minerals credit must prioritize domestic producers and existing free trade agreement partners."

What we're watching: U.S. engagement at the Indo-Pacific Economic Framework, or IPEF, where Indonesia is involved in multilateral trade talks.

Go deeper