The May 2025 meeting between President Donald Trump and China's leader Xi Jinping in Beijing highlighted a critical minerals chokepoint, following global tariffs and China's rare earth export controls that severely impacted US, Japanese, and European automakers. China dominates 30 of 44 critical minerals, holding over 70% market share and 93% of magnet manufacturing, leveraging this control through measures like the foreign direct product rule.
The US and global partners are responding with a dual strategy: biding time and building resilience through diverse supplies. Significant public and private investments involve the Pentagon's $400 million, DOE's $1.82 billion for US manufacturing, an expanded Development Finance Corporation, and the Export-Import Bank's $10 billion Project Vault for a strategic reserve. International cooperation intensifies via new trade agreements, blocs, and diplomatic initiatives including Pax Silica and the Critical Minerals Ministerial. Resource-rich Global South nations like the Democratic Republic of Congo and Indonesia assert leverage through export quotas, attracting foreign direct investment, exemplified by the Lobito Transit Corridor. These efforts aim to diversify supply chains despite long lead times and accelerating demand from electric vehicles, AI, and defense.
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