The US and Japan agreed last week to strengthen their supply chains of critical minerals like cobalt, lithium and nickel.
In the agreement, signed on March 28, the partners agreed to not impose export duties between the US and Japan on critical minerals. They also said they would take action to address non-market policies of other countries that impact the critical minerals trade.
As the US diversifies its trading partners, they risk further complications in its critical minerals supply chain.
As part of the agreement the investments made by foreign powers in the industry will be reviewed. The allies will also upgrade their information-sharing and enforcement in relation to labor rights violations.
“Japan is one of our most valued trading partners,” said Trade Representative for America Katherine Tai. She said the partnership was a welcome moment to strengthen the critical minerals supply chain.
Japan’s Ambassador to the US, Tomita Koji, added that securing critical minerals was vital. This, he said, was partly due to the increased demand for electric vehicles and the batteries powering them.
The two countries made other trade agreements in relation to the semiconductor industry. The countries made an agreement in July last year to create a joint research center for next-generation semiconductors.
The agreement was brought in for similar reasons, to soften America’s relationship China.
According to Gina Raimondo, US Commerce Secretary, “semiconductors are the linchpin of [America’s] economic and national security”. The agreement pays special attention to newer, smaller chips, most of which are currently produced by Taiwan. The new research facility in Japan will be focusing on 2nm chips.
The US and Japan said during the launch that they want to establish supply chain resilience in the sector, and said they would build a strong battery supply chain.
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