United States, EU Agree to Start Talks on Critical Minerals Amid Trade Tensions

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Biden’s IRA, a $430bln law that offers massive subsidies for U.S.-made products and is aimed at addressing the climate crisis and promoting renewable energy, has prompted European anger. EU officials say allies should stick together and form a common front against bigger threats from China

Amid trade frictions between the United States and the European Union, President Joe Biden and European Commission President Ursula von der Leyen agreed on Friday that the two sides would launch talks on critical minerals used for electric vehicles.

Biden and von der Leyen met at the White House against a backdrop of European complaints that clean energy subsidies in the U.S. Inflation Reduction Act (IRA) and others will divert investment away from Europe and hurt their economies. The war in Ukraine was also a major agenda item.

Biden’s IRA, a $430 billion law that offers massive subsidies for U.S.-made products and is aimed at addressing the climate crisis and promoting renewable energy, has prompted European anger. EU officials say allies should stick together and form a common front against bigger threats from China.

The Biden administration has sought to address European concerns while sticking to the core tenets of the law, which represented a major domestic political victory for Biden upon its passage.

In a joint statement after their meeting, the two leaders said they intended to “immediately begin negotiations on a targeted critical minerals agreement” to ensure that minerals extracted or processed in the EU would count for clean vehicle tax credits under the IRA law.

“This kind of agreement would further our shared goals of boosting our mineral production and processing and expanding access to sources of critical minerals that are sustainable, trusted, and free of labor abuses,” they said in the statement. “Cooperation is also necessary to reduce unwanted strategic dependencies in these supply chains, and to ensure that they are diversified and developed with trusted partners.”

Speaking in the Oval Office at the start of the meeting, both Biden and von der Leyen underlined the strength of their partnership, and the unified support for Ukraine and efforts to hold Russia accountable for its invasion.

“We are not only partners, the European Union and the United States are good friends,” von der Leyen said, highlighting U.S. support for Europe in finding alternate energy supplies so EU members could reduce their dependence on Russian supplies.

“We supported Europe‚Äôs energy security,” Biden said. “And at the same time, we’re driving new investments to create clean energy industries and jobs, and make sure we have supply chains available to both … our continents.”

The European Commission last month presented its Green Deal Industrial Plan in response to the U.S. IRA law, with increased levels of state aid to help Europe compete as a manufacturing hub for clean tech products.

Biden said the idea of driving investments and securing supply chains underpinned both measures.

Jake Colvin, president of the National Foreign Trade Council, a corporate lobby group, urged the White House to raise U.S. industry concerns on what he called a “discriminatory digital sovereignty agenda” aimed at undermining U.S. companies.

“A level transatlantic playing field is critical but that has to go both ways, he said. “The White House needs to step up and underscore the need for American companies to be regulated in the same manner as their European counterparts when operating on the other side of the Atlantic.”

During a December visit by France’s President Emmanuel Macron to the White House, Biden said that bills aimed at boosting U.S. renewable energy and the semiconductor industry have “glitches” that can be addressed.

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