SUMMARY
- The U.S. government has been offering policy support for the domestic critical minerals industry and taking strategic stakes in various businesses to reshore the supply chain and reduce dependence on China, which dominates global processing.
- China handles 98% of refined gallium, 68% of germanium, and most cobalt, lithium, and rare earths. The U.S. imports over 80% of its rare earths and relies entirely on foreign sources for 12 of its 50 critical minerals—a vulnerability underscored by China’s recent export restrictions.
- President Trump and Chinese President Xi Jinping are expected to meet at the end of this month to seal a ‘fair’ trade deal. Critical minerals will be a significant part of the deal. There is growing recognition on both sides that while the U.S. and China have significant economic interdependence, neither is in a position to concede easily.
- China maintains substantial leverage through its dominance in critical minerals and key manufacturing supply chains, while the U.S. and Europe remain vital end markets for Chinese exports. This mutual dependency limits the likelihood of a full-scale economic rupture but heightens the complexity of negotiations.
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