The year leading up to that moment had been particularly volatile. On Apr. 2, 2025, President Trump announced global tariffs, with the highest rates against China, which faced a 145% tariff and responded with its own 125% tariff on American goods. Shortly after, China introduced export controls on rare earths, a subset of critical minerals that are vital for industries ranging from defense to green energy, and whose downstream processing and production the country dominates. Within a month, shipments of rare earth magnets from China dropped by 74% year-on-year, and automakers in the United States, Japan, and Europe, dependent on these inputs, slowed or, in some cases, closed production.
Later that fall, President Trump met Xi in South Korea, setting the stage for their Beijing summit. But statements about stability that came out of that meeting don’t mean stasis. In fact, the equations behind this long-standing economic contest between the US and China may be rebalancing, albeit slowly, and with long time horizons still ahead. That’s because, in the leadup to and following the Beijing summit in May, a wave of private and public investments, offtake agreements, international commitments, and pushes for stockpiling and industrialization of critical minerals supply chains through new mines and new production facilities have begun to move the market.
Beijing did not come to dominate the critical minerals market overnight. “The Middle East has oil. China has rare earth metals,” Deng Xiaoping, the leader of China’s economic reforms, is believed to have said in 1992. Even that statement may understate the degree of market concentration seen today. During the Arab oil embargo, the Organization of the Petroleum Exporting Countries accounted for slightly over 50% of global crude oil production, a figure that has since fallen to below 35%. China, by contrast, now leads production for 30 of the 44 critical minerals for which there are reliable estimates, commands an average market share of over 70% for strategic minerals, and accounts for 93% of magnet manufacturing.
But China’s long-term dominance of critical minerals is far from settled. New deposits of minerals are being discovered with increasing frequency around the world. Global rare earth mine production has more than tripled since 2014, rising from 110,000 tons to over 390,000 tons. New sources of nickel and cobalt are coming online in places like Indonesia, and supplies of lithium, graphite, and rare earths are diversifying. Fresh investments in critical minerals processing, manufacturing, and recycling are expanding global capacity—including new processing and refining facilities in Japan and South Korea, built to serve American supply chains in response to the Inflation Reduction Act and the One Big, Beautiful Bill Act.
Meanwhile, the AI and defense booms have driven a step change across industries. America imports more than 70% of 12 of the 20 critical minerals used in data centers. With global data center expansion accelerating, semiconductors, including leading-edge chips made in Taiwan, are intensifying the need for minerals like silicon. At the same time, the appetite for the chips that power both mass-produced and sometimes exquisite defense systems is surging. The Silverado Policy Accelerator has identified 12 strategic minerals—from antimony and germanium to tungsten—without which missile systems, military aircraft, ammunition, and more cannot be produced or operated. National security is a pressing concern for every government, but the world’s defense supply chains are global. And they rest on mineral deposits, refining capacity, and industrial bases that cross borders, and therefore require strategic cooperation.
Old industrial policy meets new commodity statecraft
Last year, the Department of Defense broke new ground, announcing an investment of another $400 million—this time in MP Materials—along with a price floor and offtake agreement. Meanwhile, the Department of Energy is taking a 5% stake in Lithium America and a 5% stake in Thacker Pass, potentially one of the largest lithium deposits in North America. The Development Finance Corporation, created during the first Trump Administration and now granted an expanded mandate, along with new access to equity, and a higher financing cap, is becoming a leader on strategic investments in critical minerals. That growth includes more deals—and larger ones—especially in consortia with the private sector and in geographies such as Angola and Malawi, where processing can be co-located with mining.
Critical minerals have become an important part of longstanding trade negotiations. The US Trade Representative is pursuing plurilateral agreements, including pricing mechanisms and border measures, and critical minerals have become standard features of new trade agreements. The mandatory review of the United States-Mexico-Canada Agreement (USMCA)—the six-year-old free-trade pact between the three countries—in July will reportedly be no exception. And nations across the globe are forming new blocs with critical minerals at their core. The European Union’s Mercosur Partnership agreement with Latin American countries—an agreement that took decades to negotiate—aims to promote European investment in Western Hemispheric processing to reduce dependence on single sources of supply. Japan is also expanding its economic ties to Latin America, with an eye toward the region’s mineral deposits.
That leverage is delivering results: these resource-rich nations are attracting greater foreign direct investment. Consider the Lobito Transit Corridor, an 800-mile, rail-based logistics network running from Angola’s border with the Democratic Republic of Congo to Lobito, a port city on Angola’s Atlantic Ocean coast. The rail corridor was built by European colonists in 1903 and had been closed since sustaining damage during Angola’s civil war in the late 1970s. China, which controlled a majority of critical mineral mines in the region, helped rebuild it between the mid-2000s and the mid-2010s. The Biden Administration invested four billion dollars in the Lobito Corridor. During the second Trump Administration, the Development Finance Corporation has finalized multiple loans and agreements to move the initiative forward. A new rail project, jointly funded by the European Union and the US, aims to connect the existing rail network into the copper-rich areas of Zambia.
Even matters of war and peace are now about critical materials. The United States-Ukraine Reconstruction Investment Fund gave Washington a stake in future revenue earned from Kyiv’s critical mineral reserves, including vast deposits of titanium and lithium in areas currently occupied by Russia. A US-mediated agreement between the Democratic Republic of the Congo and Rwanda led to a strategic partnership offering American firms preferential access. And after the ouster of Nicolás Maduro, Secretary of the Interior Doug Burgum brought a delegation of more than two dozen American mining and trading companies to Venezuela.
Unlocking the private sector
The global market for critical minerals is adjusting to new demand signals, finding substitutes, shifting supply chains, and boosting extraction at existing sites and in new geographies. America has the advantages of its free economic competition, leading research institutions, deep capital markets, and global partnerships. Capitalizing on those advantages will require building more competitive industries up and down the supply chain and strategic investments by both the public and private sectors. America will also need prudent regulatory strategies and reforms.
Education and training represent another area demanding clear-eyed policy, particularly in fields like metals processing and synthesis, as new technologies transform the character of work. This is an arena of real competition. In recent years, China has produced over 50% more STEM doctoral graduates annually than the US, a gap that continues to widen. One Chinese battery manufacturer alone employs more than 18,000 researchers, far surpassing competitors in the West.
Scientific discoveries are reshaping the market as well, making it so that the materials deemed critical today may not be critical tomorrow. Rare earth-free magnets, AI-assisted materials discovery and processing, and rare earth recovery and refining from electronic and other waste materials, as prioritized in a recent $134 million Department of Energy announcement, all hold promise. New opportunities in recycling and other circular solutions are expanding the toolkit for addressing critical minerals supply challenges.
The path to de-risking is steep and long, especially across complex, global supply chains. Past efforts to reduce dependence have repeatedly cycled through moments of urgency, only to be forgotten amid market and political changes. To have lasting effect, new frameworks, partnerships and investments will need to be operationalized and institutionalized, with deadlines, commitments, and dedicated experts committed to following through.
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