American Resources Policy Network
Promoting the development of American mineral resources.
  • Blog

  • HOMEPAGE >> BLOG >> New U.S.-UK “Atlantic Declaration” Heralds New Era of Cooperation, Ties into Broader Global Push to Decouple Supply Chains From China

New U.S.-UK “Atlantic Declaration” Heralds New Era of Cooperation, Ties into Broader Global Push to Decouple Supply Chains From China

The United States and the United Kingdom announced the launch of a new “Atlantic Declaration” earlier this month— a self-proclaimed “first of its kind” partnership “which will see our countries work together more closely than ever before across the full spectrum of our economic, technological, commercial and trade relations.”

At the heart of the compact is the mutual goal of reducing vulnerabilities across technology supply chains, developing technologies of the future, and strengthening investment one another’s industries.

On the critical minerals front, U.S. President Joe Biden committed to asking Congress to designate the United Kingdom a “domestic source” within the context of Title III of the Defense Production Act (currently, Canada stands alone as a “domestic source”), and both countries will promptly begin negotiations on a critical minerals agreement which would allow British firms to access tax credits available under the U.S. Inflation Reduction Act (IRA).

While underscoring that the United States is serious about bolstering domestic supply chains by incentivizing investment in the critical minerals sector, the IRA had also sparked worries of a withdrawal of investment from manufacturers in nations that currently do not have a free trade agreement with the United States.

Under the terms of the to-be-finalized deal between the U.S. and the UK, British electric car manufacturers would be eligible to 50% of the tax credits available to U.S. companies under the IRA, according to Politico.

Globally, the IRA has prompted a flurry of activity, including the European Union’s response to the United States’ IRA in March of this year: the recently-dropped Critical Raw Materials Act (CRMA) paired with sister legislation, the Net Zero Industry Act (NZIA), which aims to support investment in manufacturing capacity in ‘net zero emissions’ technologies in Europe.

(Read ARPN’s discussion of the EU’s response to the IRA here.)

Only days later, the United States Trade Representative Katherine Tai and Japan’s Ambassador to the United States, Tomita Koji, signed a critical minerals agreement (“Agreement Between the Government of Japan and the Government of the United States of America on Strengthening Critical Minerals Supply Chains”) which builds on the 2019 U.S.-Japan Trade Agreement and seeks to strengthen and diversify critical minerals supply chains and promote the adoption of electric vehicle battery technologies.

The U.S.-UK agreement is the latest in this series of negotiations, but it is likely not the last. As the push to decouple supply chains from adversaries like China and leverage greater cooperation among like-minded allies continues, ARPN will follow closely to document these developments.