Trump’s Policies to Impact North American Mining

With Donald Trump now in office as President of the United States, the North American mining sector faces challenges on two fronts: tax policy changes and shifts in critical minerals supply chains. While Mexico and Canada can supply essential minerals to the United States, future developments depend on Trump’s decisions to fulfill his campaign promises.

Taxes on Imports

During his inauguration speech, Trump announced plans to renovate the country's trade system by establishing the External Revenue Service to collect tariffs he had proposed during his campaign and in the months leading up to his presidency. “Instead of taxing our citizens to enrich other countries, we will tariff and tax foreign countries to enrich our citizens. It will be massive amounts of money pouring into our treasury coming from foreign sources,” Trump said.  

When questioned about the potential tariffs from the Trump administration, Mexican President Claudia Sheinbaum stated that Mexico would not hesitate to impose retaliatory tariffs. However, she has consistently emphasized that her government will seek to build a positive relationship with the US government.

While Trump did not mention specific taxes for minerals or the mining sector during his campaign, he called for taxing all imports to the United States, including a 10% to 20% tax on general imports, a 60% tariff on Chinese imports, and a 25% tariff on Mexican and Canadian goods. While these measures are yet to be implemented,these could have a broader impact on North American mineral supply chains, especially in the context of re-shoring initiatives and  trade war with China, which recently banned the export of critical materials like gallium, germanium, antimony, and superhard materials, and is tightening the review process for graphite items. Furthermore, the United States heavily relies on Canadian and Mexican steel and aluminum imports, with Canada supplying 60% aluminum and 25% steel, and Mexico providing 15% of its steel. 

Critical Minerals Supply 

During his inauguration speech, Trump said the United States will use its oil and gas reserves to fuel its manufacturing sector and to sell cheap energy to the world. “I will also declare a national energy emergency. We will drill, baby, drill. We will bring prices down, fill our strategic reserves up again, right to the top, and export American energy all over the world. We will be a rich nation again,” he said. 

Experts had anticipated that despite Trump’s preference for fossil fuels, he would not disrupt the clean energy sector, which relies on large amounts of critical minerals. This is especially true given that former President Joe Biden’s Inflation Reduction Act (IRA) provided economic benefits to several Republican states, making it unlikely for them to reverse the measure, and keeping the pace of demand for critical minerals, especially due to Chinese export restrictions. Trump’s relaxed stance on environmental regulations can also impact mining operations. He has committed to lifting a 20-year mining moratorium in northern Minnesota and expanding access to uranium deposits on federal lands, as reported by MBN.

In the same vein, Trump has also called for acquiring Greenland, citing national security concerns due its strategic location and the presence of important natural resources like rare earth minerals. Deep-sea mining is also expected to gain momentum in the United States, as recently, the House of Representaitves passed a defense funding bill directing the Ministry of Defense to assess the feasibility of processing deep-sea minerals domestically. 

Mexico’s Role in the US Supply Chain 

Mexico is a key supplier of 14 out of the 58 strategic minerals identified by the United States, including fluorspar, strontium, and gold. Mexico has seen increased production of these minerals over the past five years, positioning it to capture a larger share of US imports, particularly for minerals traditionally sourced from China, such as graphite, lead, and selenium. However, Mexico still faces challenges in the high-capacity battery sector, with limited manganese production compared to major global producers, as reported by MBN.

The United States is also a major buyer of Mexico’s copper cathodes and refined silver. US companies like Newmont and Coeur Mining are leading silver producers in Mexico. Sonora is Mexico’s sole producer of graphite, with 98% of it exported to the United States, which also purchases 53% of Mexico’s refined lead.