US Vice President JD Vance on Wednesday outlined plans to create a preferential trade bloc for critical minerals, calling for coordinated price floors among allied nations as Washington steps up efforts to reduce reliance on China.
Speaking to visiting ministers in Washington, Vance said the initiative would prevent low-priced mineral imports from undercutting domestic manufacturers, without directly naming China.
Under the proposal, reference prices would be set at each stage of mineral production, with adjustable tariffs used to enforce minimum pricing among participating countries.
China’s Dominance Drives US Strategy
China controls much of the global processing capacity for key minerals used in semiconductors, electric vehicles and advanced weapons systems. US officials say Beijing has used this dominance as economic leverage by restricting exports, depressing prices and deterring alternative supply chains.
Washington has grown increasingly alarmed since China curtailed rare-earth exports last year, disrupting production for US and European manufacturers.
Dozens of Countries Attend Washington Talks
Secretary of State Marco Rubio said representatives from 55 countries attended the meeting, including India, Japan, South Korea, Germany, Australia, Thailand and the Democratic Republic of Congo.
Rubio said critical mineral supply chains were overly concentrated in a single country, turning them into a geopolitical pressure point.
US Trade Representative Jamieson Greer announced new bilateral and trilateral initiatives with Mexico, the European Union and Japan aimed at strengthening mineral supply chains and paving the way for broader cooperation.
Price Supports and Stockpiles Under Review
The proposals include possible price supports, subsidies, market standards and guaranteed purchases to encourage investment in mining and refining projects.
Earlier this week, President Donald Trump launched a strategic US minerals stockpile known as Project Vault, backed by $10 billion in government funding and $2 billion in private capital.
The US, EU and Japan also said they would pursue coordination through the G7 and the Minerals Security Partnership.
Market Reaction and Investor Concerns
Shares of several US-listed mineral companies fell sharply following news of the proposed trade bloc, reflecting investor unease over government intervention in pricing.
Analysts said guaranteed minimum prices could unlock private investment in projects that struggle to compete with cheaper Chinese supply, though the approach could raise costs for manufacturers in the short term and escalate trade tensions.
China Pushes Back on US Narrative
China’s embassy in Washington said Beijing had played a constructive role in maintaining stable global mineral supply chains and was willing to continue doing so.
Expanded Chinese export controls last year contributed to production delays for automakers and stalled US plans to boost lithium output, highlighting vulnerabilities that have unsettled Washington and its allies.
Broader Shift in US Trade Policy
The initiative signals a wider US push to work with partners despite strains caused by Trump’s “America First” tariff agenda. Officials say coordinated action is necessary to reduce exposure to supply disruptions in strategically vital sectors.
Scott Kennedy of the Center for Strategic and International Studies said the move reflected growing recognition in Washington that cooperation with allies was essential where China dominates supply.
Interior Secretary Doug Burgum said 11 additional countries would be named to the proposed minerals trade club this week, with at least 20 more expressing strong interest in joining.
with inputs from Reuters
