US Seeks Allies in Critical Minerals Bloc to Counter China’s Dominance

US Seeks Critical Minerals Trading Bloc to Counter China’s Influence

HOUSTON – The United States is pursuing the creation of a new critical minerals trading bloc with allies, an effort that began tentatively and is expected to take shape in the coming months. The initiative aims to lessen reliance on China’s dominance in the supply of minerals essential to modern technologies and national security.

According to reports, Japan, the European Union, and Mexico have expressed interest in exploring the US proposal for a preferential trading zone, potentially including coordinated price floors for critical minerals.

While not explicitly named in speeches during the Critical Minerals Ministerial meeting hosted by Secretary of State Marco Rubio on February 4, the proposed bloc is widely understood as a response to China’s significant control over many critical minerals. China currently accounts for 60 percent of rare earths deposits and nearly 90 percent of the processing capacity needed to create products like rare earth magnets, vital for industries ranging from defense to consumer electronics.

US Vice-President J.D. Vance unveiled the proposal, suggesting a “preferential trade zone for critical minerals, protected from external disruptions through enforceable price floors,” maintained through “adjustable tariffs.” Vance expressed concern over China’s ability to undercut Western companies, potentially driving domestic manufacturers out of the market only to later raise prices unfairly.

“We want members to form a trading bloc among allies and partners,” Vance said, promising “immediate and durable” benefits to those who join. He urged hesitant nations to collaborate, emphasizing the opportunity for self-reliance and reduced dependence on external sources.

Secretary Rubio echoed these concerns, noting that critical mineral supply is “heavily concentrated in the hands of one country,” creating potential vulnerabilities to geopolitical leverage or disruptions like pandemics and political instability.

Japan’s Minister of State for Foreign Affairs Iwao Horii affirmed Tokyo’s support for the US initiative, pledging to collaborate with as many countries as possible to ensure its success. He emphasized the importance of a stable supply of critical minerals for the sustainable development of the global economy.

The US Trade Representative’s (USTR) office announced that the US, Japan, and the EU will finalize a memorandum of understanding within 30 days, outlining joint support for projects in mining, refining, processing, and recycling. USTR Jamieson Greer stated that this announcement signals a commitment from major market economies to establish a new framework for preferential trade in critical minerals.

A similar action plan between the US and Mexico is expected to be implemented over the next 60 days, according to another USTR statement.

India’s Foreign Minister S. Jaishankar indicated his country’s support for the FORGE initiative (Forum on Resource Geostrategic Engagement), highlighting the challenges of excessive concentration in the supply chain and the need for structured international cooperation to mitigate risks. He also emphasized the importance of de-risking supply chains.

Delegations from South Korea, Malaysia, Thailand, the Philippines, and Australia attended the meeting. Denmark and Greenland, despite Greenland’s mineral wealth, were not present.

Singapore, a member of the US-led Pax Silica initiative launched in December 2025 to secure AI supply chains, has not formally commented on the proposed trading bloc. However, Foreign Minister Vivian Balakrishnan stated on social media that Singapore attended the meeting at Secretary Rubio’s invitation to discuss strengthening critical minerals supply chains. He affirmed Singapore’s role as a trusted hub in global supply chains and its commitment to open, rules-based trade, highlighting the importance of minerals like nickel, lithium, and cobalt for semiconductors, electric vehicles, renewable energy, and defense technologies.

The US is currently fully dependent on imports for 12 critical minerals and relies on imports for over half of its consumption of an additional 29. Networking with allies is considered critical to enhancing supply and reducing dependence on China.

Notably, former President Trump posted on social media that he had an “excellent” call with Chinese President Xi Jinping, discussing trade and security issues, including China’s commitment to purchasing US soybeans and airplanes. Critical minerals were not mentioned in the discussion.

The Chinese Embassy in Washington offered a muted response, stating that China has “long played an important and constructive role in keeping the global industrial and supply chains of critical minerals safe and stable” and is “willing to continue to make active efforts in this regard.”