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Biden poised to invoke DPA to boost battery metals

Posted April. 01, 2022 07:48,   

Updated April. 01, 2022 07:48


The Bloomberg reported Wednesday (local time) that U.S. President Joe Biden is poised to invoke the Defense Product Act (DPA), a law introduced during the Korean War in the 1950s, to curb reliance on Chinese rare earth minerals.

The Bloomberg said President Biden will invoke the DPA to allow an access to $750 million for American mining companies producing lithium, nickel, graphite, cobalt and manganese. The DPA was enforced in the 1950s by President Harry Truman to help fund the production of weapon-grade steel for the Korean War. When invoked, the DPA will preferentially finance the local producers of goods deemed by the president essential to American national security.

The types of minerals covered by the DPA include those essential to battery production for electric vehicles, and the U.S. is relying on China for most of its mineral demand. In other words, President Biden is mobilizing a Cold-War era program to keep China in check for his ambition for EV industry.

The Biden administration has also given some hints at changing its trade policy towards China. In a written statement submitted to the House Ways and Means Committee, U.S. Trade Representative Katherine Tai said, “The U.S. needs to expand its strategy to include defending our values and economic interests from the negative impacts of the PRC’s unfair economic policies and practices,” adding that it is time to turn the page on the old playbook with China, which focused on changing its behavior.

On the other hand, the Republican Party is highlighting the allegations of President Biden’s second son, Hunter Biden, over his cozy relationship with China and other issues regarding Russia. Hunter Biden is currently under investigation by the FBI over tax evasion. The Washington Post reported an analysis on the emails from the hard drive of Hunter’s laptop indicated that he and his brother James Biden had received around $4.8 million from CEFC China Energy for consulting and legal fees over 14 months since 2017.