Ansel Bayly and Sarah Tzinieris
U.S. President Joe Biden (second from left) participates in a roundtable on securing critical minerals for a future made in America, in the South Court Auditorium in the Eisenhower Executive Office Building at the White House, Feb. 22, 2022.
“When I think about climate change, I think jobs,” U.S. President Joe Biden has repeatedly said. His landmark Inflation Reduction Act (IRA) embodies this idea, tying together U.S. climate and industrial policies with a vast array of subsidies aimed at sparking a green manufacturing boom. Built into these subsidies are mechanisms to secure U.S. supply chains and to shore up domestic manufacturing, which has atrophied in recent decades, strategic priorities that Biden inherited from his predecessor, Donald Trump.
Although recent U.S. policymaking has exhibited a hyperfocus on supply chain security for semiconductors and other dual-use items, an area of equal – arguably greater – strategic significance is the supply of critical minerals, the building blocks of most advanced technologies, including those with military application.
Ever-present, but often unspoken, in Washington’s supply chain strategy is China. From the nickel used in fighter jet engines to the rare earth elements used in wind turbines, China’s dominance in the global supply of critical minerals presents a potential chokehold on U.S. industry. China accounts for 77 percent of the world’s refined cobalt, 65 percent of its chemical lithium, and 91 percent of its battery-grade graphite. All three minerals are essential for the production of lithium-ion batteries, a key component in the green transition.
China’s market dominance exists in part due to generous state subsidies. Analysis by the Center for Strategic and International Studies calculates a “conservative estimate” of $230 billion in electric vehicle (EV) subsidies for the period 2009-2023. Increasingly, green technologies are fundamental to Xi Jinping’s “high quality growth” strategy, which aims to spur high-productivity advanced manufacturing sectors amid a broader slump in the Chinese economy.
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