The US and Japan will sign a trade agreement covering critical minerals needed for electric car batteries on Tuesday, as Washington pushes to reduce its supply chain dependency on China.As part of the deal, the countries will refrain from imposing export duties on lithium, cobalt, manganese, nickel and graphite. They will also share information on potential labour violations in the supply chain for those critical minerals and “identify opportunities to build their respective capacities”.

Japan announced the deal ahead of an expected signing later on Tuesday. It comes as the Biden administration prepares to release guidance on how electric-car makers can qualify for the maximum tax credit under the Inflation Reduction Act, a landmark piece of climate legislation enacted by the US Congress last year to jump-start clean energy production.

The IRA, which seeks to reduce US emissions to half of 2005 levels by 2030, provides tax credits for companies that source parts and materials from countries with which Washington has a free trade agreement.