This week, the US announced its proposal to establish a multilateral critical minerals trading bloc. The initiative, presented at the inaugural Critical Minerals Ministerial meeting in Washington, seeks to align key US allies and partners on a shared economic and strategic goal of reducing dependence on China for vital raw materials essential to modern technology and national security.
Vice President JD Vance, speaking at the gathering hosted by Secretary of State Marco Rubio, emphasized the urgent need for economic self-reliance and collaborative action to prevent Beijing’s long-standing market tactics from weakening the West’s industrial foundations. “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 to representatives from over 50 nations spanning Europe, Asia, Africa, and Latin America.
The initiative comes amid heightened geopolitical tensions and strategic competition between Washington and Beijing. China currently controls around 70% of global rare earth mining and processes about 90% of output, giving it a near-monopoly on key raw materials required for manufacturing electric vehicles, smartphones, advanced military systems, and renewable energy infrastructure.
The proposal for a trading bloc, which US officials say has already signed on initial participants, builds on the idea that collective market action, such as coordinated tariffs and pricing floors, can serve as a buffer against China’s history of flooding the market with cheap minerals to deter foreign competition, only to spike prices once rival producers collapse. “China’s strategic use of market manipulation has made many countries dangerously reliant on its supply of critical minerals,” said Vance. “Our goal within this bloc is to create stable pricing, diverse production centers, and resilient supply chains protected from external shocks.”
The plan includes mechanisms to discourage member states from circumventing bloc policies by importing cheaper Chinese minerals. Enforcement in non-defense industries poses a particular challenge, even though the Pentagon already sets strict standards for defense contractors.
Despite lingering unease among US allies over President Trump’s combative “America First” rhetoric and controversial foreign policy decisions, including his interest in Greenland and heavy-handed actions in Venezuela, countries like Japan, South Korea, Germany, India, and Australia have expressed strong support for the critical minerals initiative.
Iwao Horii, Japan’s Minister of State for Foreign Affairs, noted that Japan is “fully onboard” with the initiative. “Critical minerals and their stable supply are indispensable to the sustainable development of the global economy,” he added. However, notable absentees like Denmark and Greenland, the mineral-rich Arctic territory whose acquisition Trump previously pursued, underscore lingering diplomatic friction, even as nations find common ground on mineral security policy.
The trading bloc initiative supplements the administration’s broader strategy, which includes the launch of “Project Vault”, a $12 billion strategic stockpile of rare earths and other critical minerals. The project is backed by $10 billion in loans from the U.S. Export-Import Bank and $2 billion in private capital.
“We prioritize these moves because the stakes couldn’t be higher,” said Secretary of the Interior Doug Burgum. “These minerals go into everything from missiles to AI accelerators.”Alongside Project Vault, the administration has also taken equity stakes in several U.S.-based critical mineral companies, including MP Materials, USA Rare Earth, Lithium Americas, and Trilogy Metals. It has allocated nearly $5 billion through the Department of Defense to bolster mining and processing capacity.
The US and allied nations are also moving toward formalizing pricing floors through Section 232 tariffs. Earlier deals, such as the one between the Pentagon and MP Materials, served as prototypes by combining equity investments, volume guarantees, and price floors to incentivize domestic production.
The initiative also comes as Washington holds trade talks with Mexico to integrate critical mineral policy into the US-Mexico-Canada Agreement (USMCA). US Trade Representative Jamieson Greer described the ongoing discussions as a “60-day action plan” to establish price floors and coordinated stockpiles, with a focus on geological mapping, regulatory alignment, and rapid-response mechanisms.
Meanwhile, similar coordination is underway with the European Union and Japan. A memorandum of understanding with the EU on critical mineral supply chain security is expected within 30 days. These efforts reflect what analysts describe as a nascent “geoeconomic alliance” forming to challenge China’s global commodity leverage.
Still, some warn that attempting such global market interventions introduces risks. David Abraham, author of The Elements of Power, argues that the strategy must also include building manufacturing capacity alongside mineral extraction, or risk over-investment in materials that producers, in the absence of downstream demand, cannot profitably sell. “We must align incentives all the way from the mine to the final product,” he said.
Wall Street did not react positively to the announcements. Stocks of key critical mineral producers, including MP Materials (-10%), USA Rare Earth (-10.8%), and Lithium Americas (-7.6%), fell sharply following the reveal of expansive government market interventions, as investors weighed the short-term uncertainties of price floors and global competition. Even so, supporters view the broader initiative as a necessary recalibration of global industrial policy. “The reality is that none of us have tested these tools in this context,” said one anonymous participant at the ministerial. “Most likely, it will be a bit of a menu of tools… there’s not going to be one silver bullet.”
The Critical Minerals Ministerial, described by Council on Foreign Relations fellow Heidi Crebo-Rediker as “the most ambitious multilateral gathering of the Trump administration,” underscores mounting global awareness that critical minerals are the new oil strategic resources dictating the flows of power, defense, and economic growth in the 21st century.
Or as Vice President Vance put it, summing up the new industrial vision: “What is before all of us is an opportunity at self-reliance we never again have to rely on anyone but each other, for the minerals that sustain our industries, our economies, and our sovereignty.” As negotiations continue, the world will be watching to see whether economic alignment on minerals translates into strategic resilience in an increasingly fragmented global order.