Share and Follow
WASHINGTON – In a strategic move aimed at securing essential resources, the Trump administration is poised to roll out its most ambitious initiative to date for reconstructing supply chains of critical minerals. These minerals are vital for manufacturing products ranging from jet engines to smartphones. The plan will likely involve purchase agreements with international partners and the establishment of a $12 billion U.S. strategic reserve designed to challenge China’s dominance in this sector.
On Wednesday, Vice President JD Vance is expected to deliver a keynote speech at a conference hosted by Secretary of State Marco Rubio, attended by officials representing numerous European, Asian, and African countries. The U.S. aims to finalize agreements related to supply chain logistics, although specific details have yet to emerge. In preparation, Rubio engaged in discussions with foreign ministers from South Korea and India on Tuesday, focusing on the extraction and processing of critical minerals.
This meeting and the anticipated agreements are set to follow closely on the heels of President Donald Trump’s announcement of “Project Vault.” This project involves the creation of a critical minerals stockpile, backed by a $10 billion loan from the U.S. Export and Import Bank and an additional $1.67 billion from private investors.
The administration’s decisive actions come in the wake of China’s hold over 70% of global rare earth mining and 90% of its processing capabilities. China had previously restricted the supply of these elements as a countermeasure during the tariff conflict initiated by Trump. Although a temporary truce was reached in October between Trump and Chinese President Xi Jinping, easing high tariffs and rare earth restrictions, China’s controls remain tighter than in pre-Trump times.
But China’s limits remain tighter than they were before Trump took office.
“We don’t want to ever go through what we went through a year ago,” Trump said on Monday when announcing Project Vault.
Countering China’s dominance on critical minerals
Other countries might join with the Trump administration in buying up critical minerals and taking other steps to spur industry development because the trade war revealed how vulnerable Western counties are to China, said Pini Althaus, who founded Oklahoma rare earth miner USA Rare Earth in 2019.
“They’re looking at setting up sort of a buyers’ club, if you will,” said Althaus, who now is working to develop new mines in Kazakhstan and Uzbekistan as CEO of Cove Capital. “The key producers and key consumers of critical minerals will sort of get together and work on pricing structures, floor pricing and other things.”
The government last week also made its fourth direct investment in an American critical minerals producer when it extended $1.6 billion to USA Rare Earth in exchange for stock and a repayment agreement.
Seeking government funding these days is like meeting with private equity investors because officials are scrutinizing companies to ensure anyone they invest in can deliver, Althaus said. And the government is demanding terms designed to generate a return for taxpayers as loans are repaid and stock prices increase, he said.
The stockpile strategy
Meanwhile, the U.S. Export-Import Bank’s board this week approved the $10 billion loan — the largest in its history — to help finance the setup of the U.S. Strategic Critical Minerals Reserve. It is tasked with ensuring access to critical minerals and related products for manufacturers, including battery maker Clarios, energy equipment manufacturer GE Vernova, digital storage company Western Digital and aerospace giant Boeing, according to the policy bank.
Bank President and Chairman John Jovanovic told CNBC that the project creates a public-private partnership formula that “is uniquely suited and puts America’s best foot forward.”
“What it does is it creates a scenario where there are no free riders. Everybody pitches in to solve this huge problem,” he said.
Manufacturers, which benefit the most from the reserve, are making a long-term financial commitment, Jovanovic said, while the government loan spurs private investments.
The stockpile strategy may help spark a “more organic” pricing model that excludes China, which has used its dominance to flood the market with lower-priced products to squeeze out competitors, said Wade Senti, president of the U.S. permanent magnet company AML.
The Trump administration also has injected public money directly into the sector. The Pentagon has shelled out nearly $5 billion over the past year to help ensure its access to the materials after the trade war laid bare just how beholden the U.S. is to China.
Efforts get some bipartisan support
A bipartisan group of lawmakers last month proposed creating a new agency with $2.5 billion to spur production of rare earths and the other critical minerals. The lawmakers applauded the steps by the Trump administration.
“It’s a clear sign that there is bipartisan support for securing a robust domestic supply of critical minerals that both reduces our reliance on China and stabilizes the market,” Sens. Jeanne Shaheen, D-N.H., and Todd Young, R-Ind., said in a joint statement Tuesday.
Building up a stockpile will help American companies weather future rare earth supply disruptions, but that will likely be a long-term effort because the materials are still scarce right now with China’s restrictions, said David Abraham, a rare earths expert who has followed the industry for decades and wrote the book “The Elements of Power.”
The Trump administration has focused on reinvigorating critical minerals production, but Abraham said it’s also important to encourage development of manufacturing that will use them. He noted that Trump’s decisions to cut incentives for electric vehicles and wind turbines have undercut demand for these elements in America.
Copyright 2026 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.