THE ESG ADVANTAGE: U.S. demands that new critical mineral projects meet high ESG (environmental, social and corporate governance) standards are actually an advantage when competing against China in foreign markets, rather than a handicap, Undersecretary of State Jose Fernandez told POLITICO ahead of an expected trip this week to Latin America. Reminder: The former New York-based merger, acquisitions and finance lawyer is the State Department's point man for the Minerals Security Partnership, a group of 14 countries, plus the European Union, that have a shared interest in diversifying their supply chains for minerals such as lithium, cobalt, nickel, manganese, graphite, rare earth elements and copper. “I've had some of my counterparts literally get up and give me a hug because they want our standards. They want the benefits. They realize that unless they're able to use the investment to benefit their communities, they will not succeed,” Fernandez said. But, but, but: However, Chinese “predatory pricing” is making it harder for the United States and its allies in the MSP to develop new sources of supply, he said. “You're seeing lithium prices down by 85 percent, you're seeing cobalt prices that are back to what they were five years ago. And that is discouraging investment in many of the clean energy industries of the future,” Fernandez said. Biden record: Many in the business community are disappointed that the Biden administration hasn’t been more aggressive in terms of negotiating traditional market access agreements to expand trade by reducing tariffs. Asked what he thought were the Biden administration’s biggest achievements on the international trade and economic front, Fernandez focused on the administration’s response to actual and potential supply chain disruptions “I am very proud of the fact that we have addressed our national security vulnerabilities and turned them into a competitive advantage. We have done that by working with our allies and partners, with the private sector and with our companies,” he said. Fernandez also touted the State Department’s efforts to help American companies make sales in overseas markets. “We've had commercial wins that our embassies tell us just in 2023 have amounted to $350 billion and are expected to create more than 2 million jobs in the U.S., not abroad,” he said. “Our latest numbers on commercial advocacy tell us we've contributed to more than 50 billion in U.S. export content and an estimated 220,000 good jobs.” 301 TARIFFS STILL ON HOLD: One area where Fernandez was unable to shed much light was the reason why the Office of the U.S. Trade Representative still has not announced the Biden administration’s final decision on proposed 301 tariff increases that were originally scheduled to take effect beginning Aug. 1. “That’s a USTR question,” he said. “The bottom line is, again, we’re taking action to protect American workers and businesses from unfair trade practices.” USTR has previously said it now expects to issue its final decision sometime in August, once it sorts through the large volume of comments it received. That includes groups asking the administration to cancel or delay proposed increases for non-EV lithium batteries, certain medical goods and ship-to-shore cranes. Pro’s can read Doug’s full Q&A here.
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