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China’s control over a crucial battery material will make it nearly impossible for any electric-vehicle makers to qualify for the subsidy scheme at the heart of President Joe Biden’s flagship green tech legislation, South Korea has warned.

Biden’s Inflation Reduction Act seeks to eliminate “foreign entities of concern” — which include companies with close ties to Beijing — from the US EV supply chain, with restrictions due to come into force on January 1 2025.

But Chinese companies control more than 99 per of the global market for battery-grade graphite and 69 per cent of the market for synthetic graphite used in battery anodes, according to consultancy Benchmark Minerals Intelligence.

Without an exemption to the FEOC rules for battery makers to secure graphite from Chinese suppliers, it is possible that no vehicles will qualify for the generous tax credits that the Biden administration is offering EV buyers, Ahn Duk-geun, South Korea’s minister of trade, industry and energy, has warned.

“Unless they make some kind of exemption or transition period, the whole [EV subsidy] regime will collapse,” Ahn told the Financial Times, adding that Seoul had raised the issue with the US commerce department. “I believe they will try to find a way to somehow take this market reality into consideration.”

South Korean companies have already committed to investing tens of billions of dollars in advanced technology facilities in the US in order to take advantage of expansive subsidies for semiconductor and battery manufacturing.

The US announced last week that it would offer up to $6.4bn in federal subsidies to South Korean tech giant Samsung Electronics, which is investing $40bn in its Texas facilities for cutting-edge logic chips, advanced packaging and research and development on next-generation chip technologies. SK Hynix, a maker of memory chips, is building an advanced packaging facility in Indiana.

South Korean battery makers LG Energy Solution, SK On and Samsung SDI, which have all received billions of dollars under the IRA, are projected to account for 44 per cent of North America’s total battery capacity by 2030, according to Benchmark.

But he noted that future US administrations could cause “huge trouble” for South Korean companies by modifying or repealing elements of the IRA, which Republican presidential candidate Donald Trump has threatened to gut in favour of increased fossil fuel investment. Beijing also introduced controls on graphite exports last year.

The Korea Semiconductor Industry Association has expressed concern that South Korean chipmakers’ large investments in the US could jeopardise the country’s competitive edge, with its executive director Ahn Ki-hyun telling the FT this month: “We could lose our status as a chipmaking powerhouse if our companies continue to build plants abroad.”

But Ahn, the trade minister, said extra capacity outside South Korea was required to meet booming future demand for artificial intelligence-related hardware.

“The one major difference of Korean industry from China, the US or Japan is that we have a small population and a small territory,” he said. “So we cannot produce everything here, and some of our companies need to go [overseas] to major markets. We encourage them to do that.”

The trade minister conceded that Seoul would need to offer better incentives for chipmakers to continue building more capacity in South Korea, as other countries — including the US — pursue “nationalistic industrial policies”. South Korea’s conservative president, Yoon Suk Yeol, declared last year that the country was engaged in an “all-out”, global “semiconductor war.”

But minister Ahn added that the reorientation of supply chains amid intensifying US-China tensions would benefit South Korea’s traditional strength of trade diversification, as other countries seek to reduce their dependence on China and Taiwan.

“When they try to ‘de-risk’ from any particular country, they are going to need new partners,” said Ahn. “We are a perfect partner for countries that are trying to build their own fortress — that is our survival strategy.”

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HOMESTEAD, FLORIDA: A ‘Freedom For All’ rally on July 01, 2023 to protest Senate Bill 1718. Florida Gov. Ron DeSantis and the Florida legislators passed the law to discourage undocumented workers from coming to the state. (Photo by Joe Raedle/Getty Images)

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HOMESTEAD, FLORIDA: A ‘Freedom For All’ rally on July 01, 2023 to protest Senate Bill 1718. Florida Gov. Ron DeSantis and the Florida legislators passed the law to discourage undocumented workers from coming to the state. (Photo by Joe Raedle/Getty Images)

Joe Raedle/Getty Images

1. A plan to ‘eliminate incentives’

There is a rich history of immigration in Florida, but the cause for this current moment starts with Senate Bill 1718, which was signed into law last May.

Championed by the current Republican Governor Ron DeSantis, the far-reaching legislation aims to crack down on undocumented labor.

It requires hospitals to include questions about immigration status, and makes it a felony to knowingly transport someone with undocumented status into the state.

DeSantis has boasted about how it has been “the strongest legislation against illegal immigration anywhere in the country.”

Part of his philosophy has focused on eliminating “carrots” that encourage people to come to the U.S. without documentation saying,

“People are going to come, if they get benefits. And so what you want to do is say there’s not benefits for coming illegally. You’re either here as a native or you come legally,”

2. A far reaching impact

One of the major things about this plan is that it doesn’t just impact people from coming to Florida.

It has already had a demonstrable impact on the nearly one million undocumented immigrants already living in Florida.

Some residents have already taken notice, like Manuel Vasquez, the owner of an ice cream parlor in Fort Myers Florida, who says he has seen a noticeable drop in his clientele. He says about 30% of his customers have left, and the ones who stayed are afraid.

Vasquez says that some of them have described how they have no choice but to drive to get to work.

“And what if I don’t make it back home? What happens to my family? My children?” Vasquez recalls being told.

Mostly, he says people went north, to the Carolinas or Georgia.

So while the human impact is already palpable in these communities, what about the economic impact?

3. A view from the strawberry fields

One of the key elements in Florida’s strict immigration law is a provision that makes it much harder to hire undocumented workers. And like much of the country, the state is already dealing with a tight labor market.

Farmer Fidel Sanchez instructs his workers to get rid of the fruit that fell and rotted on the ground – which there is a lot of. He worries about how long he will be able to keep going.

The Federal government estimates that nationwide, over 40% of farmworkers are undocumented.

Sanchez says, the effect of the law was immediate. Families he’d worked with for 20 or 30 years, headed north from one day to the next.

The government doesn’t care, he says. Maybe they think the crops are gonna pick themselves.

The Florida Policy Institute, estimates that this immigration law could cost the state economy $12.6 billion in its first year.

This episode was produced by Connor Donovan, Noah Caldwell and Christine Arrasmith with audio engineering by Tiffany Vera Castro.

It was edited by Jeanette Woods and Alfredo Carbajal.

A cargo ship passed through a new deep-water channel in Baltimore on Thursday, the first to cross the new channel since the Francis Scott Key Bridge collapsed last month, shutting down most traffic in the Port of Baltimore.

The bulk carrier, Balsa 94, sailed out under a Panama flag Thursday morning using a new 35-foot channel, The Associated Press reported. It is headed toward St. John, Canada, and is expected to arrive next Monday.

It comes nearly four weeks after Dali, a 984-foot cargo ship, crashed into the Francis Scott Key Bridge, causing the structure to collapse into the Patapsco River.

The ship issued a last-minute mayday call, allowing police to halt traffic moments before the crash, but eight individuals working on the bridge were unable to get off and were thrown into the water.

Two workers were rescued and survived, and the bodies of four victims have been recovered. Two more workers are still missing and presumed dead.

The collapse brought maritime traffic to a halt, and crews are still working through the massive cleanup process. The Balsa is one of five vessels previously stuck in the port that can now use the new temporary channel.

The new 35-foot channel opened Thursday morning, and is the fourth temporary channel created to circumvent the damage. The other channels have been primarily used by vessels involved in the cleanup effort.

The newest temporary channel will remain open until Monday or Tuesday of next week, U.S. Coast Guard officials said.

Earlier this week, the city of Baltimore filed court documents arguing the owner and operator of the Dali should not be able to avoid liability. The city claimed the vessel was “unseaworthy” when it left the Baltimore port last month and alleged Grace Ocean Private, the owner of Dali, and the ship’s operator, Synergy Marine Group, are “grossly and potentially criminally negligent.”

“For more than four decades, cargo ships made thousands of trips every year under the Key Bridge without incident,” the attorneys wrote. “There was nothing about March 26, 2024, that should have changed that.”

In the days after the collapse, Grace Ocean and Synergy asked a federal court to limit their legal liability to about $43.6 million.

The city is arguing this liability cannot be limited at this time without a trial, where the companies’ “failures” could be shown.

The Hill reached out to the city of Baltimore for further comment.