A bipartisan group of lawmakers proposes a new $2.5 billion agency to spur production of rare earths and other metals key mineralsThe Trump administration has moved aggressively to break China’s control of markets for materials critical to high-tech products such as cell phones, electric vehicles, jet fighters and missiles.
It’s too early to tell how the bill, if passed, will align with White House policies, but whatever approach it takes, the United States is at a critical juncture to significantly reduce its reliance on China after Beijing used its dominance of key mineral markets to gain leverage in its trade war with Washington. President Donald Trump and Chinese President Xi Jinping agreed to a one-year truce in October in which Beijing will continue to export critical minerals while the United States will ease export controls on U.S. technology to China.
The Pentagon has empty out The United States has spent nearly $5 billion over the past year to help secure its access to raw materials in the wake of the trade war, exposing its reliance on China, which processes more than 90% of the world’s critical minerals. To break Beijing’s stranglehold, the U.S. government is Obtain equity Among a handful of critical mining companies, and in some cases, the price of certain commodities is guaranteed using practices that seem more likely to come from China than a Republican administration.
The bill introduced Thursday by Rep. Jeanne Shaheen, D-Ind., and Sen. Todd Young, R-Ind., would support a more market-based approach by creating an independent agency charged with building inventories of critical minerals and related products, stabilizing prices and encouraging domestic and allied production to help ensure stable supplies, not just for the military but for the broader economy and manufacturers.
Shaheen called the legislation “a historic investment” to make the U.S. economy more resilient to China’s dominance, which she said leaves the U.S. vulnerable to economic coercion. Yang said establishing the new reserves was a “much-needed, positive step needed to protect our national and economic security.”
new sense of urgency
When Trump imposed widespread tariffs last spring, Beijing retaliated not just with tit-for-tat tariffs but also with severe restrictions on exports of key minerals, forcing Washington to make concessions and ultimately agree to a truce when the two leaders met in South Korea.
In a speech on Monday, he space exploration technologies corp.Defense Secretary Pete Hegseth revealed that the Pentagon has “invested more than $4.5 billion in capital commitments” in the past five months alone to complete six key mineral deals that will “help the United States move away from market manipulation.”
One deal involves the Pentagon providing $150 million in preferred stock to Atlantic Alumina to save the country’s last alumina refinery and build its first large-scale gallium production facility in Louisiana.
Last year, the Pentagon announced that it would Purchased $400 million in preferred stock MP Materials owns the only rare earth mine in the United States in Pass Mountain, California, and has a $1.4 billion joint partnership with ReElement Technologies Corp. to build a domestic rare earth magnet supply chain.
The U.S. government’s major move to acquire stakes has prompted some analysts to observe that Washington is turning to some form of state capitalism to compete with Beijing.
“Despite the danger of political interference, the strategic logic is compelling,” wrote Ellie Rostrom, a senior fellow at the Center for European Policy Analysis, a Washington-based research organization. She said the new model could be “a prudent way for the United States to ensure strategic autonomy and industrial sovereignty.”
But companies across the industry welcomed the Trump administration’s intervention.
“He is playing three-dimensional chess with critical minerals like no previous president has done. Given the military and strategic vulnerabilities we face from having to import so much of our technology and defense infrastructure, now is the time,” said Jim Sims, NioCorp’s chief communications officer. The company is trying to raise the money needed to build a mine in southeastern Nebraska.
Rely on allies for help
In addition to trying to boost domestic production, the Trump administration is also trying to secure some of these key elements through allies. In October, Trump signed a Signs $8.5 billion deal with Australia Invest in the mining industry there, the president is now actively trying Take over Greenland exist Hope to one day be able to extract rare earths from there.
Finance ministers from the Group of Seven nations gathered in Washington on Monday to discuss vulnerabilities in their supply chains for critical minerals.
U.S. Treasury Secretary Scott Bessent, who has led multiple rounds of trade negotiations with Beijing, urged attendees to improve supply chain resilience and thanked them for their willingness to work together “to pursue decisive action and durable solutions,” a U.S. Treasury statement said.
The bill introduced by Shaheen and Yang on Thursday would encourage domestic and allied producers to produce.
Past efforts to promote rare earth production
Congress has been pushing legislation over the past few years to protect U.S. military and civilian industries from Beijing’s repression. The issue becomes a pressing one every time China adopts its tried-and-true strategy of either limiting supply or turning to dumping additional critical minerals on the market to drive down prices and force any potential competitors out of business.
The Biden administration is trying to increase domestic demand for critical minerals by pushing for more production of electric cars and windmills. But the Trump administration has largely eliminated incentives for these products, choosing instead to focus directly on increasing production of critical minerals.
Most past efforts have been much more limited in scale than what the government did last year and were largely abandoned after China softened its stance and eased access to critical minerals.
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Fink reported from Omaha, Nebraska. Associated Press writer Konstantin Tolopin contributed to this report.