Description:
H.R. 7983 would amend the Internal Revenue Code to define “free trade agreement,” for the purposes of the new clean-vehicle tax credit, as an international agreement approved by the Congress to eliminate duties and other restrictions on trade. As enacted in Public Law 117-69 (an act to provide for reconciliation pursuant to title II of S. Con. Res. 14), the clean-vehicle credit can be claimed if a vehicle’s battery meets a requirement for battery-critical mineral content. That requirement stipulates that the critical minerals must have been extracted or processed in the United States or in a country with which the United States has a free trade agreement. There is no statutory definition of the term free trade agreement. The Department of the Treasury has designated the critical minerals agreement between the United States and Japan as a free trade agreement for the purposes of determining the amount of the clean-vehicle credit. That agreement, unlike others identified as free trade agreements by the U.S. Trade Representative, has not been approved by the Congress.
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