Illustration: Sarah Grillo/Axios
Republicans are moving bills to exploit a weakness in the IRA's electric vehicle credit: China's role in the global economy.
Why it matters: The effort presages how a Trump administration or GOP-controlled Congress may whittle the IRA's consumer EV tax credit program.
Driving the news: Two bills targeting President Biden's trade deals and EV industry IP licensing agreements won approval along party lines Wednesday from the Ways & Means Committee.
- One of the measures would redefine a "free trade agreement" in the IRA to rule out mini-trade deals on minerals like the one Biden struck with Japan.
- FTAs are crucial for cars to get the minerals-focused part of the EV credit — a policy that's intended to build a non-China minerals supply chain.
The other measure would make it so that qualifying manufacturers can't use "licensing agreements" with "foreign entities of concern" — a term used for Chinese businesses.
- This is the issue that Republicans (and Joe Manchin) have with the Ford-CATL battery plant.
Between the lines: One would think bills undermining the IRA wouldn't stand a chance in the Senate. Yet on China policy, there's more than meets the eye.
- House Democrats chafed at these bills during markup. But we're also watching the bipartisan frustration with that Japan deal.
- The loudest critic has been Senate Finance Chair Ron Wyden. He told Axios he was unfamiliar with the House bill, but had texted with W&M Chair Jason Smith and pledged to get an update.
What they're saying: Raja Krishnamoorthi, ranking member on the House China select committee, told Axios that on these foreign supply chains, the "big issue here is: what are the alternatives?"
- "Have we stood up any kind of supply chain in America or elsewhere that may be non-CCP related, that can take the place of whatever we are seeking to phase out?"
What industry's saying: Al Gore III of the Zero Emission Transportation Association defended the Biden administration's approach to the foreign sourcing language.
- "[They're] rightly oriented around strengthening our control of battery and mineral supply chains and creating jobs across the United States," he said.
What's next: The most bipartisan space for anti-China bills on EV supply chains is the House select committee, which just lost its chair, Mike Gallagher, who is leaving Congress.
- The new chair is John Moolenaar, whom you may recall authored legislation that would bar DOE from funding companies with China-related business deals.
- "I think [Moolenaar] is going to continue Mike's general direction and his approach in the direction of bipartisanship," Krishnamoorthi said.
