The Biden Administration is looking to the United Kingdom as a source of critical minerals for automakers and other high-tech manufacturers. But whether its attempt to lessen the nation’s dependence on current providers such as China and Africa will translate into a formal trade agreement remains to be seen.

In June, the U.S. and U.K. announced an Atlantic Declaration, a wide-ranging effort to strengthen economic, technology and trade ties between the two countries. Among its goals is the negotiation of a critical minerals agreement that would allow U.K.-based exporters access to incentives offered under the Inflation Reduction Act, signed into law in August of 2022. That provision of the IRA had previously been restricted to U.S. suppliers.

“The United States and the United Kingdom resolve to partner to build resilient, diversified, and secure supply chains and reduce strategic dependencies,” the White House said in a statement announcing the Atlantic Declaration.

From the U.S. perspective, the agreement looks to bolster the U.K. as a source of five critical minerals: cobalt, graphite, lithium, manganese and nickel. Under the provisions set forth in the Atlantic Declaration, materials mined or processed in the U.K. would count as domestic sourcing for American-made vehicles eligible for tax credits under the IRA.

All five types of minerals are key ingredients in the manufacture of electric vehicles. The Biden Administration has set a target of 50% of all new car sales in the U.S. to be EVs by the year 2030, but current supply lines and sourcing strategies aren’t adequate to meet that goal.

The U.K. might seem like an unlikely source of mined or processed minerals, compared with higher-profile producers like China and the Democratic Republic of the Congo. Yet it’s the world’s 12 largest exporter of cobalt, 16^th largest of graphite, 12^th largest of manganese, 11^th largest of raw nickel and is ramping up the mining of lithium.

Concerns about the environment and human rights are prompting both U.S. government and industry to lessen their reliance on China and other current suppliers of critical minerals. “We intend to use these focused negotiations to ensure the consistency of our approaches on supply chain diversification and robust labor and environmental standards to support the creation of well-paying jobs with a free and fair choice to join a labor union on both sides of the Atlantic,” the Administration said.

If formalized, the collaboration could provide U.K. minerals producers with up to $18 billion in incentives under the IRA, says Daniel Smith, director of sustainability and ESG (environmental, social and governance) with supply chain software provider e2open.

Whether this ambitious “action plan” will translate into real action is uncertain at this point. Smith calls the Atlantic Declaration “more of an initiative than a policy yet.” Its trade provisions would need to be ratified by the U.S. Congress, which could be slow to act — or even hostile to any proposal by the Biden Administration — as the 2024 presidential campaign season approaches. On the other hand, there might be bipartisan support for any initiative that reduces the nation’s reliance on raw materials from China.

A complete divorce, however, is unlikely, given the complexity of China’s trade and investment ties around the world. Even manufacturers seeking to produce more semiconductors in the U.S. might end up having a Chinese connection, Smith says, muddying the definition of what constitutes domestic sourcing and eligibility for incentives under the IRA. Meanwhile, purely domestic suppliers of certain critical materials might resent producers from the U.K. receiving the same favorable treatment.

Similar pushback could come from the U.K.’s automotive sector, which needs access to minerals for its own production needs. Jeremy Wrathall, founder of Cornish Lithium, told the BBC that “it would be a tragedy” if the U.K. ended up exporting critical minerals because it lacked a domestic EV manufacturing industry.

Smith is nevertheless confident that the Atlantic Declaration will translate into an effective vehicle for shifting at least some sourcing of critical raw materials for U.S. manufacturers. He believes growing concerns over the impact of climate change will help motivate government and industry to take concrete action.

“It’s become a business imperative,” he says. “It’s a boardroom topic. I’m optimistic about the chances of getting this done collaboratively and in a timely fashion.”

NEXT: The battle over “rare” earth metals.