In a rapidly developing global and economic climate, tensions are expected up and down the supply chain. Notably, the US-Canada supply chain encompassing critical minerals, electric vehicle (EV) batteries and semiconductors is presenting significant issues. Contributing factors range from legislative action to the incessant demand for tech advancement, leaving corporations across both countries grappling to maintain their respective market positions.
According to a recent article by JD Supra, the Inflation Reduction Act (“IRA”), a new legislation originating from the United States, has raised contention due to its domestic sourcing provisions. The European Union isn’t the only entity voicing uproar – these criticisms have found an echo in Canada too. Those concerned argue that the IRA may hamper global competitiveness of Canadian enterprise.
Among those voicing objections is Michael Harvey, vice president, policy & international, of the Canadian Chamber of Commerce. Harvey warned of potential damage to Canadian global competitiveness resulting from the IRA’s stringent provisions. Details of IRA’s intended effects and its potential hardships on business entities are yet to unfold fully, yet critics are gathering their voices.
Such intricate cross-border supply chain issues certainly underline the necessity for continuously updated and meticulously drafted trade agreements. Indeed, for corporations and law firms with a vested interest in the US-Canada supply arena, it’s an issue necessitating undivided attention. The IPA’s consequences, both direct and indirect, may ripple across the supply chains of critical minerals, EV batteries, and semiconductors with far-reaching effects.
As nations grapple with the implications of such legislation on their global market presence, companies will benefit from proactive adaptation strategies. Legal professionals are encouraged to remain informed and prepared, offering thorough guidance through unprecedented complexities in these supply chains. Given the pace at which these circumstances are evolving, up-to-date knowledge of international law and understanding of domestic stipulations of all involved nations is more important than ever.