US Plans Critical Minerals Trading Bloc to Counter China

WASHINGTON: The Trump administration has announced a new plan to form a critical minerals “trading bloc” with US allies and partner countries. The goal is to reduce global dependence on China, which currently dominates the supply of key minerals needed for industries such as defence, electric vehicles, and consumer electronics.

The plan was announced during a major international meeting in Washington hosted by US Secretary of State Marco Rubio, attended by officials from several dozen European, Asian and African countries.

Why the US is pushing this plan

Vice President JD Vance said the US-China trade tensions over the past year exposed how dependent many countries still are on minerals that China controls.

He said the US wants collective action to ensure the West becomes more self-reliant.

“We want members to form a trading bloc among allies and partners,” Vance said, adding that the bloc should guarantee access to critical minerals while expanding production across the member countries.

How the trading bloc will work

According to the administration, the bloc will aim to:

• Create stable and predictable prices for critical minerals

• Maintain minimum price levels through tariffs and trade rules

• Offer members financing support

• Build supply chains that are less vulnerable to disruption

Officials said this approach is meant to move beyond simply criticising China’s dominance and instead create a working alternative supply system.

US claims China controls prices and supply

Vance accused China of using a strategy where it sells minerals at very low prices to weaken competitors, preventing mining projects in other countries from developing. Later, China increases prices after competitors fail to grow.

Under the US proposal, prices within the trade zone would remain more consistent over time, helping companies invest in mining and processing with less risk.

Challenges: stopping countries from buying cheap Chinese minerals

Experts say enforcing the system may be difficult.

Ian Lange, an economics professor at the Colorado School of Mines, warned that countries and companies may still try to buy cheaper Chinese minerals secretly if rules are not strict.

He said the Pentagon can control mineral sourcing for defence contractors, but it will be harder to enforce the same rules on industries like electric vehicle manufacturing.

Project Vault: US strategic stockpile plan

Along with the trading bloc plan, President Donald Trump announced Project Vault, a new plan to create a strategic US stockpile of rare earth elements.

Project Vault will be funded through:

• A $10 billion loan from the US Export-Import Bank

• Nearly $1.67 billion in private capital

US invests directly in rare earth production

The US government has also made major investments to boost domestic production.

It recently provided $1.6 billion to USA Rare Earth in exchange for stock and a repayment agreement.

Over the past year, the Pentagon has spent nearly $5 billion to encourage mining and mineral supply growth.

China’s dominance remains the biggest concern

The Trump administration says China controls:

• Around 70% of global rare earth mining

• Around 90% of rare earth processing

Even though the US and China reached a truce to ease tariffs and restrictions, China’s export limits are still tighter than before Trump returned to office.

Key countries support the US move

Japan confirmed it supports the US initiative.

Japan’s minister of state for foreign affairs, Iwao Horii, said stable critical mineral supply is essential for the global economy.

The European Union, Japan, and Mexico also announced they will work with the United States to coordinate trade policies and create price floors to support mineral supply chains outside China.

They said they will prepare an agreement outlining the steps they will take and explore expanding the effort to include more like-minded nations.

Some allies absent

While major allies like France and the United Kingdom attended, Denmark and Greenland did not join the meeting, even though Greenland is known for mineral resources.

The meeting took place at a time of tensions between Washington and some allies over Trump’s territorial ambitions and global policy approach.

US mining bill passed in House

On the same day, the Republican-controlled House passed a bill to accelerate mining on federal lands.

Supporters say it will help the US increase domestic mineral supply, while Democrats and conservation groups criticised it as giving too much freedom to mining companies.

The bill now moves to the Senate and would turn Trump’s executive orders on mining into law.