On Tuesday, U.S. President Donald Trump called for an investigation into the possibility of imposing new tariffs on all imports of critical minerals, significantly intensifying tensions with global trade partners and targeting China, the leading force in the industry.
The order lays bare what manufacturers, industry consultants, academics and others have long warned Washington about: that the U.S. is overly reliant on Beijing and others for processed versions of the minerals that power its entire economy.
Lutnick To Start Probe
Trump signed an order at the White House directing Commerce Secretary Howard Lutnick to start a national security probe under Section 232 of the Trade Expansion Act of 1962. That is the same law Trump used in his first term to impose 25% global tariffs on steel and aluminum and one he used in February to launch a probe into potential copper tariffs.
Market dynamics for all critical minerals – including cobalt, nickel and the 17 rare earths – will be studied for potential tariffs, according to the order, which added uranium and any other elements that U.S. federal officials deem necessary.
The U.S. currently extracts and processes scant amounts of lithium, has only one nickel mine but no nickel smelter, and has no cobalt mine or refinery. While it has multiple copper mines, the U.S. has only two copper smelters and is reliant on other nations to process that key red metal.
‘Risks To National Security’
“The dependence of the United States on imports and the vulnerability of our supply chains raises the potential for risks to national security, defense readiness, price stability, and economic prosperity and resilience,” Trump said in the order.
China’s Export Restrictions
Beijing earlier this month placed export restrictions on rare earths in response to Trump’s recent broad tariffs. Rare earths are a group of 17 elements used across the defense, electric vehicle, energy and electronics industries. The United States has only one rare earths mine and most of its processed supply comes from China.
Those restrictions from China were seen as the latest demonstration of the country’s ability to weaponize its dominance over the mining and processing of critical minerals after it put outright bans on the export of three other metals last year to the U.S. and slapped export controls on others.
Chinese mining companies across the globe have been flooding markets with cheap supplies of many critical minerals in recent years, fueling calls from industry and investors for action from Washington to support U.S. projects.
(With inputs from Reuters)
