The year 2023 has seen increased attention from both Congress and the Biden Administration on the importance of securing critical supply chains, specifically in relation to batteries that rely heavily on lithium and critical minerals sourced from China. While national security concerns have been the primary focus, there has also been a significant emphasis on human rights issues, particularly the enforcement of the Uyghur Forced Labor Prevention Act (UFLPA).
In response to the role of Chinese battery companies in the U.S. supply chain, numerous investigations, hearings, and legislation have been introduced. Two companies in particular, Contemporary Amperex Technology Co. Limited (CATL) and Gotion High-Tech Co. (Gotion), have received significant attention for their partnerships with U.S. businesses and their eligibility for U.S. tax credits under the Inflation Reduction Act (IRA).
Government agencies have also provided guidance on the eligibility of certain products for federal programs based on their relationship with the Chinese government.
The Uyghur Forced Labor Prevention Act (UFLPA) has played a crucial role in scrutinizing battery components. This act establishes a presumption that goods manufactured wholly or in part in the Xinjiang Uyghur Autonomous Region (XUAR) or produced by entities listed on the UFLPA Entity List are produced with forced labor. As a result, restrictions have been placed on the entry of such goods into the United States.
Another important development has been the inclusion of certain entities on the UFLPA Entity List. CATL was called for inclusion on this list by Senator Rubio and his colleagues, while Camel Group Co. Ltd. (Camel), a leading car battery manufacturer, was also added. Entities on this list are presumed to be in violation of U.S. law, and the importation of their goods into the country is prohibited.
The House Select Committee on the Chinese Communist Party (CCP) has been actively addressing concerns surrounding batteries sourced from China. Their investigation has focused on national security risks as well as the potential use of forced labor in the manufacturing process. The committee has also explored issues related to the cobalt mining industry in the Democratic Republic of Congo and its connection to Chinese companies.
Additionally, the potential benefits of tax credits for Chinese companies under the Inflation Reduction Act have been a topic of discussion in 2023. The House Ways and Means Committee has raised concerns about contracts between major EV manufacturers and CATL, as well as the risk of federal subsidies benefiting Chinese companies instead of American workers. Efforts to address this issue include the introduction of the “No Official Giveaways of Taxpayers’ Income to Oppressive Nations (NO GOTION) Act” and restrictions on eligibility for tax credit programs based on foreign ownership.
In summary, the focus on securing critical supply chains, especially in relation to batteries sourced from China, has intensifіed in 2023. Both national security risks and human rights concerns have been driving forces behind these efforts. Through investigations, legislation, and guidance, the U.S. government aims to ensure that the supply chain remains resilient, sustainable, and free from forced labor practices.
The source of the article is from the blog regiozottegem.be