Vice President JD Vance has announced that the Trump administration wants to create a critical minerals trading bloc with its allies that will use tariffs to maintain price floors and defend against China’s tactic of flooding the market to undermine any potential competitors.
Speaking at a meeting of Foreign Ministers at the State Department, Vance said, “We want members to form a trading bloc among allies and partners, one that guarantees American access to American industrial might while also expanding production across the entire zone.”
“What is before all of us is an opportunity at self-reliance that we never have to rely on anybody else except for each other, for the critical minerals necessary to sustain our industries and to sustain growth.”
JD Vance
Vance asserted that the trade war over the past year exposed how dependent most countries are on the critical minerals that China has a stranglehold on.
Critical minerals are needed for everything from jet engines to smartphones. China dominates the market for those ingredients crucial to high-tech products.
Vance said at the opening of the meeting that Secretary of State Marco Rubio hosted with officials from several dozen European, Asian and African nations, “I think a lot of us have learned the hard way in some ways over the last year, how much our economies depend on these critical minerals.”
The meeting comes at a time of significant tensions between Washington and major allies over President Donald Trump’s territorial ambitions, from Greenland to Canada, and his moves to exert control over Venezuela and other nations.
His rhetoric directed at US partners has led to frustration and anger. The conference, however, is an indication that the Republican administration is seeking to build relationships when it comes to issues it deems key national security priorities.
Vance said some countries have signed on the trading bloc, which is designed to ensure stable prices and will provide members access to financing and the critical minerals.
He hoped others would agree to after the meeting. Administration officials said the plan will help the West move beyond complaining about the problem of access to critical minerals to actually solving it.
Rubio said, “Everyone here has a role to play, and that’s why we’re so grateful for you coming and being a part of this gathering that I hope will lead to not just more gatherings, but action.”
Japan Fully On Board With US Initiative
Japan’s Minister of state for foreign affairs, Iwao Horii, said that Tokyo was fully on board with the US initiative and would work with as many countries as possible to ensure it is a success. “Critical minerals and (their) stable supply is indispensable to the sustainable development of the global economy,” he said.
Ian Lange, an economics professor who focuses on rare earths at the Colorado School of Mines, noted that to make the new trading group work, it will be important to have ways to keep countries from buying cheap Chinese materials on the side and to encourage companies from getting the critical minerals they need from China. “Let’s just say it’s standard economics or standard behavior. If I can cheat and get away with it, I will,” he said.
At least for defense contractors, Lange said the Pentagon can enforce where those companies get their critical minerals, but it may be harder with electric vehicle makers and other manufacturers.
Trump’s administration is making such bold moves after China, which controls 70% of the world’s rare earths mining and 90% of the processing, choked off the flow of the elements in response to Trump’s tariff war.
The two global powers are in a one-year truce after Trump and Xi Jinping met in October and agreed to pull back on high tariffs and stepped-up rare earth restrictions. However, China’s limits remain tighter than they were before Trump took office.
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