US Builds Global Alliance to Counter China’s Minerals Dominance

The United States has stepped up its global push to secure critical minerals, launching a preferential trade network with partner nations that includes coordinated pricing mechanisms aimed at reducing China’s dominance over supply chains vital for technology, energy, and national security.

The strategy was outlined during the Critical Minerals Ministerial held on Feb. 4. More than 55 countries participated in the talks, including South Korea, India, Japan, Germany, Australia, and the Democratic Republic of Congo, each contributing mining or refining capacity. Secretary of State Marco Rubio warned that supply of these materials is concentrated in a single country, turning minerals into geopolitical leverage. 

US Trade Representative Jamieson Greer announced new cooperation frameworks with Mexico and a trilateral pact with the EU and Japan to reinforce critical mineral supply chains. The initiatives will examine tools such as price supports, standards, subsidies, and guaranteed offtake to stimulate production. Separately, Argentina confirmed a framework agreement with the US to diversify supply chains and expand copper and lithium exports.

After the gathering, Washington confirmed it had finalized bilateral mineral cooperation frameworks with 11 countries, adding to 10 agreements reached in recent months, and concluded negotiations with another 17 governments. These arrangements are intended to improve price stability, encourage project development, promote competitive markets, and widen access to capital across the sector.

US Secretary of State Marco Rubio used the occasion to introduce a new platform called the Forum on Resource Geostrategic Engagement, or FORGE. The initiative is designed to align government policy and private investment across partner states while creating a global network to support mineral projects. Rubio said participation is expanding, with more countries expected to join as cooperation deepens.

FORGE will operate alongside an earlier partnership known as Pax Silica, which focuses on securing supply chains linked to artificial intelligence. Unlike Pax Silica, FORGE has a wider mandate, covering mineral pricing, project execution, and cross-border policy coordination.

US officials cautioned against the risks of concentrating production in China, pointing to vulnerabilities ranging from geopolitical pressure to supply shocks triggered by health crises or political instability. 

Rubio also raised concerns over government-backed subsidies and other market distortions that have eroded competitiveness and discouraged new projects outside dominant suppliers. Vice President JD Vance added that Washington intends to prevent low-cost mineral inflows from weakening domestic and allied industries. Under the plan, benchmark prices would be introduced at different stages of the value chain, supported by variable tariffs to ensure minimum pricing levels for members of the preferential group.

Legislative Support: SECURE Minerals Act

The investment aligns with last week’s unveiling of the SECURE Minerals Act, a US$2.5 billion initiative introduced by Senators Jeanne Shaheen (D-NH) and Todd Young (R-IN), and Representatives Rob Wittman (R-VA) and John Moolenaar (R-MI). The legislation aims to strengthen domestic supply chains, reduce US dependence on foreign sources, and address economic and national security concerns.

The SECURE Act proposes the creation of a Strategic Resilience Reserve (SRR), an independent government corporation overseen by a seven-member board appointed by the President and confirmed by the Senate. The reserve is intended to stabilize markets, create jobs in aerospace, automotive, and technology sectors, and provide a buffer against global supply disruptions.

China’s Dominance in Critical Minerals and Strategic Risks

Critical minerals are central to energy technologies, high-tech industries, defense, and advanced manufacturing. However, global supply chains are heavily dependent on China, creating strategic vulnerabilities. The International Energy Agency’s Global Critical Minerals Outlook 2025 shows that China dominates the refining of 19 out of 20 key strategic minerals, with an average market share of 70%, a concentration that has grown in recent years. This reliance on a single supplier exposes industries to geopolitical tensions, trade disruptions, and technical failures.

China’s control is particularly pronounced in rare earth elements, which are critical for permanent magnets used in electric vehicles, wind turbines, industrial motors, defense systems, and data centers. In 2024, China accounted for about 60% of global rare earth mining output and 91% of refining capacity. Its share of permanent magnet production has increased from 50% two decades ago to 94% today. This concentration makes global supply chains in energy, automotive, defense, and advanced technology highly susceptible to disruption.

Export controls have further intensified these risks. In April 2025, China imposed restrictions on seven heavy rare earths and related products, leading to shortages for US and European manufacturers and driving European prices up to six times domestic Chinese levels. By October, these controls expanded to include foreign-made products containing Chinese-sourced rare earths, additional elements such as holmium, erbium, and ytterbium, and essential processing equipment. These measures threaten production across sectors reliant on rare earths, including defense, aerospace, semiconductors, industrial motors, and AI data centers.

China also dominates lithium-ion battery supply chains. It controls over 80–95% of midstream and downstream production, including cathode precursors, anode materials, LFP cathodes, and battery cells. IEA stressed that new export restrictions could increase costs for electric vehicles and energy storage systems while creating vulnerabilities for strategic sectors such as defense, aerospace, AI, and medical devices.

Efforts to reduce dependency on China face structural challenges. Mining, refining, and magnet production projects outside China remain limited, and lead times for new projects often exceed eight years. Midstream battery material production outside China is insufficient to offset reliance on Chinese sources.

Some initiatives aim to diversify global supply chains. For example, France and Japan are collaborating to produce rare earth oxides in Lacq, France, linking different parts of the supply chain. Additional mining and refining projects are underway in the United States, Australia, Brazil, Tanzania, and India, and several permanent magnet manufacturing plants are starting operations in the United States, Estonia, Korea, Vietnam, and Germany. 

More recently, the United States and Brazil formed a strategic partnership focused on rare earths. Following renewed diplomatic engagement between Presidents Trump and Lula da Silva in late 2025, the initiative seeks to leverage Brazil’s 21Mt of rare earth reserves to strengthen technological and defense capabilities in the Western Hemisphere. Preliminary meetings have involved officials, industry representatives, and financial institutions, though Brazil’s sector faces challenges, including limited investment and incomplete geological surveys covering only about 30% of its territory. Despite these efforts, the pace of development remains slow relative to demand, and permanent magnet capacity outside China is still notably lower than for mining and refining.