Indonesia To Seek Free Trade Deal With USA For Critical Materials

A top minister said on Monday that Indonesia will seek a free trade deal for specific minerals supplied to the United States so that firms in the country's electric car battery supply chain may benefit from US tax rebates. (Apr 10).

Washington has published new instructions for EV tax credits under the Inflation Reduction Act (IRA), mandating that a particular dollar amount of battery components be manufactured or assembled in North America or a free trade partner.

Although Indonesia does not have a free trade agreement with the US, its nickel supplies are becoming increasingly essential in the battery supply chain.

The Southeast Asian country has been attempting to leverage its world-leading nickel reserves in order to attract investment from battery and EV manufacturers, including US firms such as Tesla and Ford.

When asked about the new IRA guidelines, Indonesian minister Luhut Pandjaitan, who has spearheaded efforts to attract US companies, said at a news conference that Jakarta will propose a limited free trade agreement (FTA) with Washington.