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.
- Since the law was enacted, the U.S. has signed a minerals-centric FTA with Japan, which we told you in May invoked ire from fair trade hawks.
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.
