US President Donald Trump’s administration on Wednesday (local time) held a ministerial event on Critical Minerals to counter China’s dominance of the industry.
Trump administration officials aim to create a trade zone for critical minerals that are key to making almost everything, including smartphones, defense equipment, magnets in wind turbines and electric vehicle (EV) engines.
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Who attended the meeting?
The event was attended by 54 countries, including the United Kingdom, the European Union, Japan, India, Australia, South Korea and the Democratic Republic of Congo. Delegates discussed the availability and access to minerals that are important for the production of key items such as computer chips and batteries for electric cars, the BBC reported.
What did the US say?
Mining and processing of such critical minerals, which also include rare earths, is led by China. However, in remarks released by the Trump administration, US Secretary of State Marco Rubio and Vice President JD Vance did not mention China by name and instead referred to “foreign supplies” of these minerals, adding that they are flooding global markets, making it difficult for countries with mineral deposits to secure the financing needed to produce them.
David Copley, a special assistant to President Donald Trump, announced that they are investing heavily in mining projects, adding that Washington is “putting hundreds of billions of capital into the mining sector to get the projects off the ground.”
A CNBC report said that following the event, the US government announced the signing of agreements with 11 countries, following 10 similar agreements signed in the past five months, with negotiations completed with an additional 17 countries.
Trump Announces “Project Vault”
The event at the Department of Critical Minerals came days after Donald Trump announced the establishment of a nearly $12 billion critical mineral stockpile, known as “Project Vault.” The initiative, aimed at reducing Washington’s dependence on China for rare earths and other key metals, will combine $2 billion in private capital with a $10 billion loan from the U.S. Export-Import Bank. It aims to create a stockpile of critical minerals and rare earths such as gallium and cobalt, Bloomberg reported.
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Speaking at the White House, Trump said the goal of Project Vault is to “ensure that American businesses and workers are never harmed by any shortage.” Furthermore, the project will focus on the purchase and storage of materials. According to officials cited by Bloomberg, producers will be able to draw on their existing material reserves, provided they replace what they are using.
Reset US-China ties?
The event came on the same day that Trump had a phone call with his Chinese counterpart, Xi Jinping, which he described as “very positive.”
Ahead of the US-hosted meeting, Chinese Foreign Ministry spokesman Lin Jian reaffirmed China’s stance on maintaining the stability and security of global industrial and supply chains for critical minerals, according to a report by Xinhua News Agency.
Lin said: ”China has always maintained that all countries must adhere to the principles of market economy and international economic and trade rules, intensify communication and dialogue, jointly maintain stable and unhindered industrial and supply chains, and promote the steady growth of the global economy.
Diplomatic relations between Beijing and Washington have been volatile since Trump announced reciprocal tariffs on nearly every country in the world. The matter quickly escalated with both countries imposing reciprocal tariffs of up to 125% and a potential trade war looming. However, the thaw occurred after representatives of the two countries met in Geneva in May last year and agreed on a significant reduction in mutual tariffs.
But tensions flared again after China announced plans in October to expand its export controls to nearly all products that included rare earth minerals. Trump called it an “extraordinarily aggressive” stance and announced the imposition of additional 100% tariffs on Chinese goods.
Later, the two leaders met for the first time in six years in South Korea on the sidelines of the Asia-Pacific Economic Cooperation (APEC) summit in October. During a closed-door meeting that lasted more than 90 minutes, the two finalized the details of the framework agreement, with Trump reducing tariffs on Chinese goods to 47% from a previously announced 57%. The announcement came after Xi promised to curb the flow of the chemical precursor fentanyl to the US.
