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Swalwell and Reschenthaler Applaud Department of Commerce Report in Support of their Rare Earth Magnet Manufacturing Production Tax Credit Act

WASHINGTON, DC — Today, Representatives Eric Swalwell (D-CA) and Guy Reschenthaler (R-PA), co-chairs of the Critical Materials Caucus, applauded the release of the Department of Commerce’s report supporting the passage of H.R. 5033, the Rare Earth Magnet Manufacturing Production Tax Credit Act. The Swalwell-Reschenthaler bill would create a production tax credit for rare earth magnets produced in the United States.

The bipartisan bill creates a $20 per kilogram production tax credit for magnets that are manufactured in the United States, or $30 per kilogram for magnets that are both manufactured in the United States and for which all component rare earth material is produced and recycled or reclaimed wholly within the United States. To be eligible, the rare earth magnets may not include any component rare earth magnet material produced in non-allied foreign nations such as China, Iran, North Korea, and Russia.

“The Department of Commerce’s determination makes clear that the United States’ complete reliance on imports of rare earth magnets is a threat to our national security. If America is to be a global leader in defense and renewable energy, we can’t let other nations like China control production of vital materials and components,” said Swalwell. “I’m thankful for the Department of Commerce’s support in passing the Rare Earth Magnet Manufacturing Production Act to help the rare earth magnet industry reemerge in the United States.”

“As a co-chair of the Congressional Critical Minerals Caucus, I applaud the Department of Commerce for recognizing the national security threat posed by rare earth magnet imports and recommending that Congress pass H.R. 5033, the Rare Earth Magnet Manufacturing Production Tax Credit Act,” said Reschenthaler. “From military weapon systems to electronics, this bipartisan legislation encourages domestic production of rare earth elements and manufacturing of rare earth magnets that will spur new economic opportunities for hardworking Americans. I call on the House to advance this bipartisan bill I introduced with my colleague Rep. Swalwell and urge my colleagues to support this commonsense legislation to promote American ingenuity and reduce our nation’s reliance on the Chinese Communist Party.”

The Department of Commerce’s report included a determination under Section 232 of the Trade Expansion Act that found that neodymium-iron-boron (NdFeB) rare earth permanent magnet imports threaten national security and made recommendations on how to increase production of rare earth permanent magnets. This was the first Section 232 investigation initiated under the Biden Administration and the investigation found that NdFeB magnet imports threaten national security.

NdFeB magnets are used in aerospace, defense, electronics, wind turbines, electric vehicles, and more. These permanent magnets are challenging to make and are not readily available in large quantities. While the U.S. currently lacks the ability to manufacture the rare earth permanent magnets, a number of American companies are working to reestablish U.S.-based permanent magnet production.

Swalwell and Reschenthaler launched the bipartisan Congressional Critical Materials Caucus in 2020 to help the United States develop the technical expertise and production capabilities to assure a long-term, secure and sustainable supply of energy critical elements like those used in rare earth magnets.

 

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For a link to the report, click here

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