The U.S. administration has announced a plan to work with the European Union, Japan, and Mexico regarding critical minerals. It is a part of a broader effort to reduce reliance on China while aligning trade policies, stabilizing prices, and steering investments into secure supply chains.
“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,” said U.S. Trade Representative Jamieson Greer.
“Through the development of these Action Plans, we will lay the groundwork for a binding plurilateral agreement on trade in critical minerals with like-minded partners,” he added.
The administration plans to achieve this through coordinated trade measures, including mechanisms such as border-adjusted price floors. The goals include protection from volatile markets and undercutting by subsidized Chinese production.
Sprott Critical Materials ETF (NASDAQ:SETM) is up 21.62% year-to-date.
Vance’s Warning
Greer’s statement followed a Critical Minerals Ministerial in Washington. At the event, Vice President JD Vance and Secretary of State Marco Rubio hosted representatives from more than 50 countries. According to a joint statement, the parties are expected to sign a memorandum of understanding within 30 days, committing to the new framework.
“Today, the international market for critical minerals is failing,” Vance said at the summit opening. “Consistent investment is nearly impossible, and it will stay that way so long as prices are erratic and unpredictable,” he clarified, according to Bloomberg.
Vance urged participating countries to create a preferential trade system with agreed price floors to stabilize investment and protect projects from sudden price collapses.
The move signals a shift toward a more formalized “club” of market-oriented economies working together. The group would secure supplies of rare earths, lithium, cobalt, and other inputs used in semiconductors, electric vehicles, and advanced weapons.
By coordinating trade policies and investment incentives, Washington and its partners aim to make new mining and processing projects more financially viable outside China, which dominates global refining capacity for many critical minerals.
The Broader Trend
The diplomatic push builds on President Donald Trump’s Monday announcement of a $12 billion stockpile of critical minerals. The stockpile’s funding will come mainly through a $10 billion loan from the U.S. Export-Import Bank and around $1.67 billion from private capital.
Trump also spoke by phone with Chinese President Xi Jinping on Wednesday and said he plans to visit China in April. Yet, he didn’t mention critical minerals in his public comment.
Image via Shutterstock
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