Jeff Green
The One Big Beautiful Bill Act is a cornerstone of President Trump’s legislative agenda. Unfortunately, in the form recently passed by the House of Representatives, it threatens to undercut the president’s priorities on critical minerals and the defense industrial base. The House passed bill includes a little-noticed phase out of a key tax credit designed to reshore domestic critical minerals production from adversary nations.
The House bill repeals clean energy tax credits from the Biden era Inflation Reduction Act (IRA) to generate revenue for other priorities. Those repeals included phasing out the IRA’s Section 45X Advanced Manufacturing Production Credit — a 10% credit applied to the domestic production of critical minerals vital to our economy and military, and one of the only incentives America has ever implemented to rebuild its critical mineral supply chains.
President Trump’s March 20 Executive Order on Critical Minerals states, “transportation, infrastructure, defense capabilities, and the next generation of technology rely upon a secure, predictable, and affordable supply of minerals.” Moreover, “our national and economic security are now acutely threatened by our reliance upon hostile foreign powers’ mineral production. It is imperative for our national security that the United States take immediate action to facilitate domestic mineral production to the maximum possible extent.” The 45X phase-out directly opposes the president’s mandate, a move surely no Republican in the House of Representatives intended.
Critical minerals like rare earths empower the magnets in missile guidance systems, the propulsion of nuclear submarines, and the sensors and control surfaces that allow aircraft and radars to function. These materials are not optional. They are essential — and today, they are overwhelmingly processed in China.
The threat of global supply chain interruption is not theoretical. In 2024, China banned the export of gallium and germanium, materials critical to semiconductors and advanced optics. In April, China banned the export of rare earth elements, citing retaliation for tariffs as their justification. Unlike an embargo in 2010 limited to Japan, today’s ban includes all countries and expands from rare earth oxides and metals to include the most vital application -- magnets. This chokes off supply of a key material needed by the aerospace, consumer electronics, robotics, and automotive industries, among others.
No comments:
Post a Comment