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The US inflation reduction act will be voted on next week with $369bn purposed for Energy Security and Climate Change programs over the next ten years.

So Solar, Wind, Green Hydrogen and EV's, $7,500 tax credit on all new EV's produced in North America.

Now that's going to put the cat amongst the pigeons on top with trade agreements violations, if Mexico are going to be attractive to foreign investments even before the new multi billion dollar investments overseas companies were already planning around restrictions in place on material sourcing for US car manufacturing suppliers.

https://www.kedglobal.com/electric-vehicles/newsView/ked202207070013

POSCO International picked Mexico as the site of its EV motor core plant following a US decision to restrict imports of electrical steel, used for EV motor cores. The plant's location is also expected to cut logistics costs for its shipments to the US.

The Mexico plant will supply $460 million worth of motor cores to an as yet unidentified automaker by 2030, according to the company.

The plant will be located in Ramos Arizpe in the state of Coahuila. The city is an auto industry hub housing both car-making plants and components suppliers.

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More components on hand to produce powertrains in that region of NW Mexico, and only a week or so ago it was announced the 5% tipping point for EV's had been reached in the US so that bill can only accelerate that.

Joe Biden wants 50% EV sales by 2030 and the US owners like big battery EV's!

Sonora going to production must be critical for the Mexican car industry having local battery grade lithium to feed the battery factories as well as a robust trade agreement, days are ticking away:

July 20th

Under USMCA Article 31.4.5, the parties shall enter into consultations within 30 days of the U.S. request, unless the parties decide otherwise. Under USMCA Article 31.6.1, if the parties do not resolve the matter through consultations within 75 days of the U.S. request, the United States may request the establishment of a panel.

Now if the bill does go through next week, I'm sure there will be a greater urgency to resolve any 'misunderstandings'

GL

https://www.businesslive.co.za/bd/world/americas/2022-07-29-us-and-mexico-clash-over-control-of-energy-market/

Separately, two Mexican officials said there was concern inside the government over the trade disagreement and a third noted the president was “seriously analysing” the matter.
A day after the US demand became official, the president addressed it, saying he had reached deals in June with 17 of 19 US energy companies, without naming them.

But if Lopez Obrador feels trapped, there was a risk he could escalate the dispute, the source said, adding: “He's not capable of backing up, because he has already gone too far.”

July 20, 2022

WASHINGTON – Today, United States Trade Representative Katherine Tai announced that the United States has requested dispute settlement consultations with Mexico under the United States-Mexico-Canada Agreement (USMCA). The consultations relate to certain measures by Mexico that undermine American companies and U.S.-produced energy in favor of Mexico’s state-owned electrical utility, the Comisión Federal de Electricidad (CFE), and state-owned oil and gas company, Petróleos Mexicanos (PEMEX).

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I would be astonished if Ganfeng haven't had talks, someone is lined up for a great fall and looks to be attempting to save face and avoid losing in the courts, energy and mining law reforms both fall under USMCA

https://mexicobusiness.news/mining/news/lithium-nationalization-violates-usmca

And our Sonora neighbour is Canadian based, an interesting appointment in March.

https://www.rocklandresources.com/20220310-rockland-resources-strengthens-its-mexican-team-and-commences-field-work-at-elektra-lithium-project

Senor Miguel Angel Romero Gonzalez joins our Mexican group to advise the Company on tenure and legal issues. Señor Romero is a prominent lawyer with the mining industry in Mexico, a former General Director of Mines in the Ministry of Economy from 2010 to March 2013, within that period he coordinated the efforts to update the Regulations of the Mining Law and collaborated to make public the mining cartography of the country. Señor Romero is also an Honorary Member of the Business Mining Council of Mexico (CONMIMEX).

The target on the Elektra project is lithium mineralization hosted in shallow claystone units in volcaniclastic sediment successions, similar to the adjacent feasibility-stage “Sonora Lithium” project, owned by Ganfeng (“Ganfeng”) Lithium (following the acquisition of Bacanora Lithium plc). Gangeng (website) is the world's largest lithium producer and supplier to the American electric car maker Tesla.

Getting heated for A_L.O

https://www.jwnenergy.com/article/2022/7/22/mexico-is-seen-risking-30b-hit-in-us-canada-trade-/

“This looks very difficult to be resolved during the consultation period because the violations are so precise, specific,” said Ramos, who saw this as one of the most potentially expensive trade spats since USMCA’s predecessor took effect in 1994. “Mexico would need to completely overhaul two pieces of legislation that are essential to AMLO.”

The fight could have a wide-ranging impact beyond Mexico’s energy sector, hitting automakers and farmers, Guajardo added. Ultimately, the battle could hurt Mexico and North America’s attractiveness to investors just as the region is expected to see a boom in trade.

Lopez Obrador defended his policies Thursday, saying the oil sector was excluded from the trade pact, an argument Smith and other trade experts dispute. At a daily press conference Wednesday after the U.S. announced its complaint, he played a song titled “Oh, so scary,” seeming to downplay his concerns. He also said he was protecting the country against “voracious companies” and added that by starting the dispute, the Biden administration risked looking like it was supporting “corrupt” firms.

https://wtvbam.com/2022/07/22/mexico-eyes-mutually-satisfactory-solution-to-u-s-energy-trade-spat-deputy-minister/

She argued that the USMCA’s dispute settlement mechanism gave investors certainty because if differences arise, like they have now, its use would help clear things up.

“The dispute resolution mechanism is a very solid mechanism, it is a mechanism that allows the investor to have greater certainty and this is very positive for the business climate,” she said.

The U.S. requested consultations under the USMCA over Mexico’s energy policies on July 20.
Under USMCA rules, the United States and Mexico would enter into consultations within 30 days of the U.S. request, unless the parties decide otherwise. If they do not resolve the matter through consultations within 75 days of the U.S. request, the United States may request the establishment of a dispute panel.

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too much to lose IMVHO and could be why Ford and possibly others haven't committed to Sonora (if interested)

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