Input Stories

In an effort to counteract China’s dominance of critical minerals production, the U.S. will work with Mexico, Japan and the European Union to develop new sources of these crucial materials, the administration announced on Wednesday (The Wall Street Journal, subscription).

The agreements: “Under the proposed agreements, the nations will work together to identify critical minerals necessary for certain industries and develop policies to encourage their mining and processing into products like rare earth magnets, U.S. officials said.”

• These latest agreements go a step further than recent critical minerals frameworks by encouraging the creation of a plurilateral preferential trade initiative, which could involve price floors for participating countries and coordinated trade policies toward those outside the zones.
• “Today’s announcement is an important signal that the world’s largest market-oriented economies are committed to developing a new paradigm for preferential trade in critical minerals,” U.S. Trade Representative Jamieson Greer said.

The big picture: China is by far the biggest player in the critical minerals market, controlling about 90% of the world’s processing capacity, the WSJ notes. In recent years, it has also imposed export controls on minerals.

• While the current trade truce between the U.S. and China has led China to soften those controls, the Trump administration has prioritized reducing American dependence on Chinese minerals over the long term—a goal the NAM strongly supports.

Further efforts: At a State Department ministerial yesterday with over 50 foreign delegations, the U.S. signed 11 bilateral critical minerals frameworks and memorandums of understanding and completed negotiations on an additional 17. An MOU with the U.K. was also announced earlier today.

• In addition, the ministerial launched the Forum on Resource Geostrategic Engagement as a successor to the Minerals Security Partnership, which will aim to establish reference prices for critical minerals based on fair market value for participating countries.

Congress in action: Legislators are also redoubling their efforts to reduce U.S. reliance on Chinese sources of critical minerals.

• Yesterday, the House passed Rep. Pete Stauber’s (R-MN) Critical Mineral Dominance Act (H.R. 4090), which directs the Department of the Interior to address supply chain vulnerabilities by expanding mineral production on federal land.

The NAM says: “Manufacturers are greatly encouraged to see our allied trading partners … working with the U.S. to strengthen critical mineral supply chains and unleash energy dominance,” said NAM President and CEO Jay Timmons.

• “Last May, the NAM asked the administration to pursue zero-for-zero tariffs and counter unfair market distortions with key allies and trading partners to maintain access to these critical manufacturing inputs and bolster global competitiveness for America’s manufacturers.”