Washington– A bipartisan group of lawmakers has proposed creating a new $2.5 billion agency to stimulate production of rare earths and other elements. Critical mineralsWhile the Trump administration has already taken tough measures to break China’s grip on the market for these materials that are critical for high-tech products, including cell phones, electric cars, jet fighters and missiles.
It is too early to know how the bill, if passed, would align with White House policy, but whatever the approach, the United States is in a crisis to significantly reduce its dependence on China, after Beijing used its dominance of the critical metals market to gain leverage in the trade war with Washington. President Donald Trump and Chinese President Xi Jinping agreed to a one-year truce in October, under which Beijing will continue to export critical minerals while the United States eases controls on the export of American technology to China.
The Pentagon has Bombed Nearly $5 billion over the past year to help ensure it gets the materials after the trade war exposed the extent of the US commitment to China, which processes more than 90% of the world’s critical minerals. To break Beijing’s stranglehold, it’s the US government that does it Taking stock shares in a handful of important metals companies, and in some cases guaranteeing the prices of certain commodities using an approach that seems more likely to come out of China’s playbook than a Republican administration.
The bill introduced Thursday by Sen. Jeanne Shaheen, D-N.H., and Sen. Todd Young, R-Ind., favors a more market-based approach by creating an independent body charged with building stocks of critical minerals and related products, stabilizing prices, and encouraging domestic and allied production to help ensure stable supplies not only for the military but also for the broader economy and manufacturers.
Shaheen called the legislation a “historic investment” to make the American economy more resilient in the face of Chinese dominance, which she said has left the United States vulnerable to economic coercion. Young said the creation of the new reserve is a “bold, much-needed step to protect our national and economic security.”
When Trump imposed sweeping tariffs last spring, Beijing responded by not only imposing tit-for-tat tariffs but also severely restricting the export of critical minerals, forcing Washington to back down and eventually agree to a truce when the leaders met in South Korea.
Defense Secretary Pete Hegseth revealed Monday, in his SpaceX speech, that in the past five months alone the Pentagon has “committed more than $4.5 billion in capital commitments” to close six critical metals deals that will “help free the United States from market manipulation.”
One deal includes $150 million of Pentagon-preferred stock in Atlantic Alumina Corp. to save the nation’s last alumina refinery and build the first large-scale gallium production facility in Louisiana.
Last year, the Pentagon announced it would do so Purchase $400 million of preferred stock At MP Materials, which owns the nation’s only operational rare earth mine in Mountain Pass, California, and has entered into a $1.4 billion joint venture with ReElement Technologies Corp. To build a local supply chain for rare earth magnets.
The US government’s radical move to acquire equity stakes has led some analysts to note that Washington is moving toward a form of state capitalism to compete with Beijing.
“Despite the risks of political intervention, the strategic logic is compelling,” wrote Eli Rostom, a senior fellow at the Washington-based think tank’s Center for European Policy Analysis. She suggested that the new model could be “a wise way for the United States to ensure strategic independence and industrial sovereignty.”
But companies across the industry welcome the Trump administration’s intervention.
“He’s playing three-dimensional chess on important minerals that no previous president has done,” said Jim Sims, NioCorp’s chief communications officer. “It’s also timely, given the military and strategic vulnerability we face by having to import a lot of these essential elements of technology and national defense.” That company is trying to finish raising the money it needs to build a mine in southeastern Nebraska.
In addition to trying to boost domestic production, the Trump administration has sought to secure some of these critical elements through allies. In October, Trump signed an agreement $8.5 billion agreement with Australia To invest in mining there, and the president is now aggressively trying to do so Control of Greenland in The hope is that one day we will be able to extract rare earth elements From there.
G7 finance ministers met in Washington on Monday due to their vulnerability in critical metals supply chains.
US Treasury Secretary Scott Besent, who has led several rounds of trade negotiations with Beijing, urged attendees to increase their supply chain resilience and thanked them for their willingness to work together “toward decisive action and durable solutions,” according to a Treasury statement.
The bill presented by Shaheen and Young on Thursday would encourage production with local and allied producers.
Congress has pushed for the past several years for legislation to protect America’s military and civilian industry from Beijing’s stranglehold. This issue has become a pressing concern every time China resorts to its proven tactics of either restricting supply or resorting to flooding the market with critical additional minerals to drive down prices and put any potential competitors out of business.
The Biden administration has sought to increase demand for critical minerals domestically by pushing for more electric vehicle and windmill production. But the Trump administration has largely eliminated incentives for these products, choosing instead to focus on directly increasing production of critical minerals.
Most of these previous efforts were on a much more limited scale than what the government did last year, and were largely abandoned after China relented and facilitated access to critical minerals.
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Funk reported from Omaha, Nebraska. AP writer Konstantin Torobin contributed reporting.