US Vice President J.D. Vance has proposed creating a new critical mineral trading bloc and adjusting price floors as Washington seeks to loosen China’s control over rare earth mineral production.
Vance said Wednesday that the trade war over the past year has exposed how dependent most countries are on critical minerals that China has a monopoly on.
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“We want our member countries to form a trade bloc among our allies and partners that expands production across the zone while guaranteeing access to U.S. industrial power,” Vance said at a meeting of foreign ministers at the U.S. State Department.
“What lies before us all is the opportunity for self-reliance, never having to rely on anyone but each other to obtain the critical minerals we need to sustain our industry and continue to grow.”
China maintains 70% of the world’s rare earth mining. Critical minerals are used in key products that consumers use every day, such as smartphones and cars.
“The United States is in a distant second place (in mining) with just 12%, leaving a huge gap to close. As a result, President Trump will spend much of 2025 meeting with leaders of Ukraine, Australia, Japan, Central and Southeast Asian countries, and “This is an effort aimed at giving the United States a better opportunity to compete with China,” said Mark Temnicki, a nonresident fellow at the Atlantic Council. Eurasia Center told Al Jazeera.
“I think many of us learned the hard way last year just how dependent our economies are on critical minerals,” Vance said at the beginning of a conference hosted by U.S. Secretary of State Marco Rubio with officials from dozens of countries in Europe, Asia and Africa.
Wednesday’s meeting was attended by South Korea, India, Thailand, Japan, Germany, Australia and the Democratic Republic of Congo.
The meeting highlighted tensions between the United States and its allies as US President Donald Trump seeks to unilaterally acquire Greenland from Denmark.
“Denmark is on high alert. Several countries in the NATO alliance have sent troops to Greenland to fortify and fortify their territory, and this is very significant because this is causing a lot of confusion and making many traditional allies and partners of the United States very uncomfortable with doing business with the United States,” Temnytsky said.
But these tensions haven’t stopped the White House from pushing for new trade blocs.
The White House announced Monday that it is building a new critical mineral stockpile, naming the project “Project Vault.” Vance’s announcement Wednesday came as Trump spoke by phone with Chinese President Xi Jinping, which he called “excellent,” but it was unclear whether the proposed bloc was mentioned.
pricing floor
Mr. Vance also said the United States would announce a price floor system, which the U.S. government hopes will free up private investment in mining and processing projects that have struggled to compete with cheaper Chinese supplies.
While this approach could reshape global supply chains for materials vital to electric vehicles, semiconductors and defense systems, it could raise costs for manufacturers in the short term and exacerbate trade tensions with China.
Rare earth export restrictions that China expanded last year have caused production delays and shutdowns at automakers in Europe and the United States, and a glut of lithium produced by China has stalled plans to expand production in the United States.
“China has long played an important and constructive role in keeping the world’s industrial chains and critical mineral supply chains safe and stable, and is ready to continue making active efforts in this regard,” the Chinese embassy in Washington told Reuters in response to questions about the talks.
China’s influence was at its peak in October when President Trump agreed to lower tariffs on Chinese goods in exchange for Beijing’s promise to postpone strict export restrictions on rare earth exports.
Wednesday’s rally highlighted a broader U.S. push to work with partners to counter China’s dominance in the sector by coordinating policy tools, as President Trump has angered allies with his sweeping “America First” tariff policies.
On Wall Street, nearly all of the important mineral companies in which the Trump administration has stakes have seen their stock prices fall in intraday trading. MP Materials fell more than 8%, Intel fell more than 3.5%, Lithium Americas fell 7.6%, Trilogy Metals fell more than 10% and U.S. Rare Earths fell 10.8%. The only outlier was South Korea Zinc, which rose 6.5%.
