【By Observer Group, Global】
Wanting to reduce its reliance on Chinese rare earths, the US knows it cannot do it alone and has to form alliances.
However, even when seeking help, President Trump still shows his unilateral bullying nature, threatening allies with tariffs and setting a "deadline."
According to White House website information, on January 14 local time, Trump signed a presidential proclamation titled "Adjusting Imports of Processed Critical Minerals and Their Derivatives in the United States," claiming to use "national security powers" to coerce global suppliers to negotiate key mineral agreements with the US, or face new trade barriers, including high tariffs and quota restrictions.
In the proclamation, Trump claimed that the US's reliance on foreign processing of critical minerals constitutes a so-called "national security threat."
China dominates the global rare earth magnet market, The Financial Times illustration
The proclamation states that the US lacks a sufficiently secure and reliable supply chain for critical minerals. As of 2024, the US completely relies on imports for 12 critical minerals, and for another 29 critical minerals, it has a net import dependency of 50% or more. Even if the US has domestic mining capabilities, such as for cobalt, nickel, and rare earth elements, it lacks sufficient domestic processing capacity to avoid downstream net import dependence.
After an investigation, the US Department of Commerce concluded that this reliance makes the defense, aerospace, telecommunications, and transportation sectors vulnerable to supply disruptions, price fluctuations, and so-called "foreign coercion," posing security risks.
"Addressing these vulnerabilities is crucial for national security," the proclamation stated, emphasizing that the US must ensure a secure supply chain for critical minerals and have sufficient domestic mining and processing capabilities to reduce reliance on foreign imports.
Trump directed U.S. Trade Representative Jacquelyn Gries and Secretary of Commerce Howard Lutnick to negotiate and reach agreements with all parties to "adjust" the import of processed critical minerals and their derivatives.
He noted that the negotiating parties have 180 days to reach binding or enforceable agreements, with a deadline of July 13 this year. If no agreement is reached by the deadline, he will bypass further review and directly implement "remedial" measures.
The South China Morning Post noted that the proclamation does not explicitly demand anything from allies but emphasizes that countries should commit to diversifying their supply chains away from "dominant and potentially coercive" sources. Measures include enhancing allies' processing capabilities, ensuring US access to purchase agreements, investing in non-Chinese facilities, and using trade stability tools to counter price fluctuations and instability.
Trump also stated in the proclamation that during negotiations, the ministers and trade representatives should consider "price floors" and other trade restrictions.
Later that evening, Gries issued a statement saying, "We need a more resilient supply chain for critical minerals; this is not a secret. By negotiating with interested parties to create economically viable markets for critical minerals, we can promote demand and enhance the supply of critical minerals in the US and partner countries."
On the 12th, G7 finance ministers met in the US to discuss rare earths, Bessent X account
China recently imposed export controls on rare earths, causing concerns in the US and Western societies about potential supply disruptions.
According to the International Energy Agency, in 2023, China accounted for over 60% of global rare earth production, and its control over the processing stage accounted for 92% of global output, almost monopolizing the global rare earth processing industry. The US Geological Survey also stated that between 2020 and 2023, 70% of the rare earth compounds and metals imported by the US came from China.
Currently, the US and the EU are developing emergency plans, including increasing local mineral production, diversifying supplier networks, and reusing certain materials, while planning to establish joint procurement and strategic reserve centers. However, many experts and officials admit there is no quick solution.
The report mentioned that the US has been increasing cooperation with allies, turning its attention to countries such as Australia, Malaysia, Indonesia, and Vietnam, aiming to build alternative supply chains.
Last October, the US and Australia signed a mineral agreement, and Trump at the time boasted that the US would have a large amount of rare earths in "one year," so much that it "would not know what to do with them." However, Australian experts at the time pointed out that establishing a stable critical mineral supply chain that does not rely on China would take the US at least ten years.
One strategy failed, so the US turned to other tricks - setting so-called "price floors."
Last September, Reuters reported that the G7 and the EU were planning to set a minimum price for rare earths and impose tariff duties and so-called carbon taxes on some Chinese exports of rare earths. This week, US Treasury Secretary Mnuchin convened a meeting of senior G7 finance ministers in Washington, with ministers from the EU, Australia, India, Mexico, and South Korea also attending, once again raising the issue of "price floors."
The South China Morning Post believes that the 180-day deadline proposed by the US puts direct pressure on the EU and India, both of which are hesitant about the "price floor" mechanism that could increase manufacturers' costs.
At a regular press conference on January 13, a media reporter asked about the G7 finance ministers' statement that they would reduce reliance on China's rare earths. Foreign Ministry spokesperson Mao Ning said that China's position of maintaining the stability and security of the global critical mineral industrial chain has not changed, and we also believe that all parties have a responsibility to do so.
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Original: toutiao.com/article/7595486085635932678/
Statement: This article represents the views of the author.