Treasury Dept Issues Guidance On IRA, Confirms Critical Mineral "Loophole"

The US Treasury Department and the IRS has released proposed guidanceon the clean vehicle provisions of the Inflation Reduction Act.

• The guidance proposes: "To be eligible for a $3,750 credit, the applicable percentage of the value of the critical minerals contained in the battery must be extracted or processed in the United States or a country with which the United States has a free trade agreement... as mandated by the Inflation Reduction Act."
• "The NPRM also details a proposed set of principles for identifying the set of countries with which the United States has a free trade agreement in effect, since this term is not defined in statute. This term could include newly negotiated critical minerals agreements."
• Implementation of the IRA has drawn rebukes from Democrat Senators Joe Manchin (D-WV) and Ron Wyden (D-OR) claiming that the USTR and Commerce Department have usurped Congressional authority by allowing allies like Japan access to IRA incentives through a selective interpretation of "free-trade agreement" status.
• Manchin wrote in a WSJ op-ed this week: "The administration is attempting at every turn to implement the bill it wanted, not the bill Congress actually passed.”