WASHINGTON – The Trump administration is intensifying efforts to reduce U.S. Reliance on China for critical minerals, unveiling a series of initiatives this week including a proposed trading bloc with allies and a $12 billion strategic stockpile initiative dubbed “Project Vault.” The moves come as concerns grow over China’s dominance in the processing of these essential materials, which underpin a wide range of technologies from electric vehicles to defense systems.
Vice President JD Vance announced Wednesday the administration’s intention to establish a trading bloc with allied nations, aiming to guarantee U.S. Access to critical minerals while simultaneously boosting production within the zone. This initiative follows a period of heightened trade tensions with China, where tariffs imposed by President Trump last year led to restrictions on the flow of key minerals. While a truce was reached to roll back some of those tariffs, China’s export controls remain tighter than pre-Trump administration levels.
The administration’s strategy is multifaceted. Project Vault, announced this week, will be funded by a $10 billion, 15-year loan from the U.S. Export-Import Bank, supplemented by approximately $1.67 billion in private capital. The goal is to create a commercial stockpile to shield U.S. Manufacturers from supply disruptions and price volatility. In addition to the stockpile, the government has recently invested directly in American critical minerals producers, including a $1.6 billion investment in USA Rare Earth in exchange for stock and a repayment agreement. The Pentagon has allocated nearly $5 billion over the past year to stimulate domestic mining operations.
These actions reflect a growing recognition that China’s control over approximately 70% of the world’s rare earth mining and 90% of processing capacity presents a significant strategic vulnerability. As noted in a recent conversation between President Trump and Chinese President Xi Jinping, trade remains a key point of discussion, though specific details regarding critical minerals were not publicly disclosed.
The proposed trading bloc is designed to ensure stable prices and provide members with access to financing and critical minerals. Administration officials believe this approach will move the West beyond simply identifying the problem of access to critical minerals and towards actively solving it. Some countries have already signaled their support for the trading bloc, with agreements announced by the European Union, Japan, and Mexico to coordinate trade policies and establish price floors.
However, challenges remain. Experts like Ian Lange, an economics professor at the Colorado School of Mines, point out the potential for countries to circumvent the bloc by purchasing cheaper materials from China. Enforcement may be easier for defense contractors, who can be directed to source materials domestically, but more difficult for manufacturers of consumer goods like electric vehicles.
The administration’s efforts are not without diplomatic complexities. While major allies like France and the United Kingdom attended the critical minerals meeting in Washington, Greenland and Denmark, which oversee the mineral-rich Arctic island of Greenland, were notably absent. This absence comes amidst broader tensions stemming from President Trump’s territorial ambitions and assertive foreign policy, including moves related to Venezuela.
Despite these tensions, the administration is signaling a willingness to build relationships on issues deemed critical to national security. Heidi Crebo-Rediker, a senior fellow at the Council on Foreign Relations, described the meeting as “the most ambitious multilateral gathering of the Trump administration,” emphasizing the importance of securing supply chains through trusted partnerships.
Japan’s minister of state for foreign affairs, Iwao Horii, affirmed Tokyo’s commitment to the U.S. Initiative, stating that a stable supply of critical minerals is “indispensable to the sustainable development of the global economy.”
Alongside the international outreach, legislative efforts are underway to further bolster domestic mining. The House of Representatives recently approved a bill aimed at accelerating mining on federal land, despite opposition from Democrats and conservation groups who argue it provides excessive leeway to foreign-owned mining corporations. The bill, which now moves to the Senate, would codify existing executive orders designed to increase domestic mining and processing of critical minerals.
The administration’s actions are a response to China’s deliberate strategy of building dominance in the critical minerals market through subsidies, market manipulation, and control of downstream processing. China previously expanded export controls on rare earths and related products in 2025, impacting industries ranging from defense to clean energy. The administration’s six-month deadline for securing arrangements with trading partners is intended to demonstrate the seriousness of the U.S. Commitment to building capacity outside of China’s sphere of influence.
