U.S. vice-president J.D. Vance announced plans for a preferential trade bloc for critical minerals, proposing a price floor, as Washington aims to counter China’s grip on minerals critical for manufacturing.
Meanwhile, President Donald Trump on Monday launched a strategic stockpile of critical minerals, called Project Vault, backed by $10 billion in seed funding from the U.S. Export-Import Bank and $2 billion in private funding.
Vance had said that the trade war over the past year exposed how dependent most countries are on the critical minerals that China has a stranglehold on.
“We want members to form a trading bloc among allies and partners, one that guarantees American access to American industrial might while also expanding production across the entire zone,” Vance said at a meeting of foreign ministers at the State Department.
“What is before all of us is an opportunity at self-reliance that we never have to rely on anybody else except for each other, for the critical minerals necessary to sustain our industries and to sustain growth.”
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Critical minerals are needed for everything, from jet engines to smartphones. China currently dominates the market for this.
“I think a lot of us have learned the hard way in some ways over the last year, how much our economies depend on these critical minerals,” Vance said at the opening of a meeting that Secretary of State Marco Rubio hosted with officials from several dozen European, Asian and African nations.
Vance also mentioned the establishment of “reference prices or critical minerals at each stage of production, pricing that reflects real-world fair market value, and for members of the preferential zone, these reference prices will operate as a floor maintained through adjustable tariffs to uphold pricing integrity.”
Shares of several mineral companies fell following the announcement.
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This comes at a time of significant tension between Washington and major allies over Trump’s territorial ambitions from Greenland, to Canada, and his move to exert control over nations like Venezuela.
The conference shows that despite the tensions, the Trump administration is attempting to build relationships when it comes to key national security priorities.
Meanwhile, Chinese President Xi Jinping spoke with Trump on Wednesday, according to Liu Pengyu, spokesperson for the Chinese embassy in Washington. Details were not immediately available.
To make the new trading group work, it will be important to have ways to keep countries from buying cheap Chinese materials on the side and to encourage companies from getting the critical minerals they need from China, said Ian Lange, an economics professor who focuses on rare earths at the Colorado School of Mines.