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China has strategically leveraged its dominance in the mineral processing sector to exert geopolitical influence, occasionally restricting exports and manipulating prices. This strategy impedes other nations’ efforts to diversify their sources of essential materials vital for producing semiconductors, electric vehicles, and advanced weaponry.
Without explicitly naming China, Vance addressed an assembly of ministers in Washington, stating, “Our goal is to prevent the influx of inexpensive critical minerals into our markets, which undermines our domestic manufacturers.”
Vance elaborated on plans to set benchmark prices for critical minerals at various production stages. He announced, “For members of the preferential zone, these benchmark prices will act as a minimum, supported by adjustable tariffs to ensure pricing stability.”
In response to China’s previous disruptions in the supply of rare earth elements crucial for American automakers and industrial manufacturers, the Trump administration intensified efforts to secure domestic sources of these essential minerals.
On Monday, President Donald Trump introduced Project Vault, a strategic initiative to stockpile critical minerals in the US. This project is supported by a $10 billion seed investment from the US Export-Import Bank, alongside $2 billion from private investors.
Trump on Monday launched a US strategic stockpile of critical minerals, called Project Vault, backed by $US10 billion in seed funding from the US Export-Import Bank and $US2 billion in private funding.
Secretary of State Marco Rubio said 55 countries attended the talks in Washington, among them South Korea, India, Thailand, Japan, Germany, Australia, and the Democratic Republic of Congo, all with varying refining or mining capabilities.
The minerals are “heavily concentrated in the hands of one country,” Rubio said, without referencing China, adding that the situation had become a “tool of leverage in geopolitics.”
US, EU AND JAPAN ANNOUNCE CRITICAL MINERAL SUPPLY CHAIN PARTNERSHIP
The US, European Union and Japan announced on Wednesday a strategic partnership to shore up the resilience of supply chains for critical minerals now dominated by China, eyeing a broader trade deal with like-minded partners that could include border-adjusted price floors and price-gap subsidies.
In a joint statement, they said the US and the EU committed to concluding a memorandum of understanding on critical minerals within a tight deadline of 30 days.
MINERAL COMPANY SHARES DROP
A multi-country effort to establish price floors of critical minerals is the Trump administration’s latest move to exert control over private business.
The White House has taken stakes in several mineral companies as well as chipmaker Intel INTC.O and has negotiated deals with drugmakers for lower prices.
Shares of mineral companies fell on news of the trade bloc. MP Materials MP.N lost 2.8 per cent, Critical Metals CRML.O dropped 7.7 per cent, NioCorp Developments NB.O was down 2.8 per cent, and USA Rare Earth USAR.O lost 6.6 per cent in morning trading in New York.
By guaranteeing minimum prices through co-ordinated trade rules, Washington hopes to unlock private investment in mining and processing projects that have struggled to compete with cheaper Chinese supply.
The approach could reshape global supply chains for materials essential to electric vehicles, semi-conductors and defence systems, while raising costs for manufacturers in the short term and escalating trade tensions with Beijing.
“China has long played an important and constructive role in keeping the global industrial and supply chains of critical minerals safe and stable and is willing to continue to make active efforts in this regard,” China’s embassy in Washington told Reuters when asked about the meeting.
China’s expanded export controls on rare earths last year caused production delays and shutdowns for auto manufacturers in Europe and the US, and a China-generated glut of lithium has stalled plans to expand production in the US.
Such dependencies have unnerved Washington and its partners, which have struggled for years to implement policies to stand up durable domestic mining and processing alternatives for lithium, nickel, rare earths and other critical minerals.
Trump, who is expected to visit China in April, posted on Truth Social that he had an “excellent” call with Chinese President Xi Jinping on Wednesday morning to discuss a range of trade and security issues from soybeans to Iran, but he made no mention of minerals.
China’s leverage over critical minerals was on full display in October when Trump agreed to trim tariffs on Chinese goods in exchange for Beijing’s pledge to hold off on stricter restrictions on rare earths exports.
Wednesday’s gathering underscores a broader US push to work with partners to counter China’s dominance in the sector by coordinating policy tools at a time when Trump has angered allies with his sweeping “America First” tariff policies.
“I think this is a recognition by the United States that it must act in concert with others to reduce its vulnerability in areas where China has supply dominance,” said Scott Kennedy, who leads the Chinese business and economics program at the Centre for Strategic and International Studies in Washington.
US Trade Representative Jamieson Greer was set to provide details on the price floor later on Wednesday to meeting participants.
Interior Secretary Doug Burgum said on Tuesday that 11 more countries would be named to a critical minerals trade club this week, joining the US, Australia, Japan, South Korea, Saudi Arabia and Thailand.
He said 20 more countries showed “strong interest” in joining the coalition.
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