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WASHINGTON,February 29,2024 – The United States is pushing to create a new trade alliance focused on critical minerals,a move directly aimed at lessening reliance on China’s dominance in the supply of elements essential for everything from smartphones to fighter jets. It’s a high-stakes gamble, and one that comes with a hefty dose of geopolitical tension.
the plan, announced Wednesday, seeks to establish a trading bloc with allies and partners, potentially using tariffs to stabilize prices and counter China’s influence.
- China currently controls approximately 70% of the world’s rare earth mining and 90% of its processing.
- The initiative follows a period of trade friction with China, including tariffs imposed by the Trump management.
- The U.S. is together investing in domestic mining and stockpiling of critical minerals.
- Several nations have already signaled support for the trading bloc, though participation isn’t worldwide.
“We want members to form a trading bloc among allies and partners, one that guarantees American access to American industrial might while also expanding production across the entire zone,” Vice President JD Vance stated at a meeting hosted by Secretary of State Marco Rubio with officials from dozens of countries across Europe, Asia, and Africa.
Countering China’s grip on Essential Resources
Q: Why is the U.S. focused on critical minerals?
A: These minerals-like rare earth elements-are vital for manufacturing a wide range of high-tech products, including defense systems, electric vehicles, and consumer electronics. China’s control over their supply poses a national security and economic risk.
The move comes after a year of escalating trade disputes between the U.S. and China, where tariffs imposed by President Donald Trump last year prompted Beijing to restrict the flow of these crucial materials. While a truce was reached to roll back some of those tariffs and restrictions, China’s limitations remain tighter than before the trade war began. The situation exposed a widespread vulnerability among nations dependent on Beijing for these key elements.
The administration is taking concrete steps to bolster domestic supply,
Japan’s minister of state for foreign affairs, Iwao Horii, expressed strong support for the U.S.initiative, stating that a stable supply of critical minerals is “indispensable to the sustainable development of the global economy.” the European Union and Mexico also announced agreements to collaborate with the U.S. on developing coordinated trade policies and price floors.
Heidi Crebo-Rediker, a senior fellow at the Council on Foreign Relations, described the meeting as “the most ambitious multilateral gathering of the Trump administration.”
Simultaneously occurring, the Republican-controlled House of Representatives approved a bill Wednesday to accelerate mining on federal land, despite opposition from Democrats and environmental groups who argue it would benefit foreign-owned mining corporations. The bill, which now heads to the Senate, would codify Trump’s executive orders aimed at boosting domestic mining and processing of critical minerals.
President Trump and Chinese President Xi Jinping discussed trade during a phone conversation Wednesday, though a social media post from Trump did not specifically mention critical minerals.