In order to decrease U.S. dependence on China for the critical minerals that power cutting-edge technologies, like electric vehicles (EV) and advanced semiconductors, the United States has taken actions to reinforce and diversify its critical minerals supply chains by encouraging domestic production and developing partnerships with allies and mineral-rich countries.Footnote 1 “China controls most of the global market in these minerals. And the fact [is] that we can't build a future that's made in America if we ourselves are dependent on China for the materials that power the products of today and tomorrow,” President Joseph R. Biden, Jr. said in early 2022 as he kicked off the administration's efforts.Footnote 2 Since then, the United States has made significant investments in domestic capacity (mining, refining, and recycling) and supported projects abroad to ensure access to minerals, but overall reliance on Chinese imports remains high.Footnote 3 U.S. initiatives to strengthen and secure critical mineral supply chains have taken on increased urgency as China has imposed a series of export controls on antimony, gallium, germanium, and graphite since the summer of 2023, culminating in a December 2024 decision to ban (or, in the case of graphite, severely restrict) their sale to the United States.Footnote 4
Under U.S. law, a critical mineral is a mineral that, according to the secretary of the interior, is “essential to the economic or national security of the United States,” “the supply chain of which is vulnerable to disruption,” and “serve[s] an essential function in the manufacturing of a product . . . , the absence of which would have significant consequences for the economic or national security of the United States.”Footnote 5 Among the fifty critical minerals on the U.S. Geological Survey's official list are:Footnote 6 gallium, which is used in high-performance semiconductors and advanced radars, as well as in phone chargers and electric vehicles;Footnote 7 germanium, which has applications for semiconductors, fiber-optic systems, and solar cells (including in space);Footnote 8 cobalt, graphite, nickel, and lithium, which are required for EV batteries;Footnote 9 antimony and tungsten, which are used in night vision goggles, armor-piercing bullets, explosives, and other military applications;Footnote 10 and neodymium, praseodymium, and other rare earth elements that are essential for wind turbines.Footnote 11 With the accelerating transition to clean energy and the increased reliance of advanced digital technologies, demand for critical minerals is expected to grow significantly.Footnote 12 Through local sources, as well as imports from abroad, such as the Democratic Republic of the Congo, Indonesia, and Papua New Guinea,Footnote 13 China dominates the market for the mining and refining of many critical minerals, including antimony (48 percent of mine production), cobalt (78 percent of refined production), gallium (98 percent of primary production), natural graphite (77 percent of mine production), and rare earth elements (69 percent of mine production).Footnote 14
U.S. measures to bolster the domestic mining, processing, and recycling of critical minerals have taken the form of grants, loans, and tax credits to support businesses, tariffs to protect manufacturers, and tax credits to promote consumer purchases. The government has provided approvals for a vanadium mine in Nevada, a gold-antinomy project in Idaho, and a zinc-manganese project in Arizona.Footnote 15 It has issued billions of dollars in loan commitments for lithium processing at mines in Nevada.Footnote 16 It has awarded tens of millions of dollars to restart a lithium mine in North Carolina and millions more for rare earth oxide processing at a mine in California.Footnote 17 As part of the Section 301 tariffs announced in 2024, the administration imposed 25 percent duties on critical minerals imported from China, including natural graphite, manganese, cobalt, aluminum, zinc, chromium, and tungsten (among others).Footnote 18 In the Inflation Reduction Act, Congress included a critical minerals tax credit for consumers who purchased new EVs by the end of 2032.Footnote 19 Eligibility for a $3,750 credit requires that a certain percentage of the critical minerals contained in the EV's battery (starting at 40 percent with cars purchased before 2024 and increasing to 80 percent in 2027 and after) were “extracted or processed . . . in the United States, or . . . any country with which the United States has a free trade agreement in effect.”Footnote 20 EVs purchased after 2024 are excluded from the credit, however, if their batteries contained any critical minerals “extracted, processed, or recycled” by a “foreign entity of concern,” a term that encompasses Chinese entities.Footnote 21 The credit's counting of critical minerals from countries “with which the United States has a free trade agreement in effect” led the United States to enter into negotiations with certain trading partners with which it lacked such agreements.Footnote 22 This resulted in the signing of a critical minerals agreement with Japan in 2023 (done controversially as an executive agreement)Footnote 23 and the entering into negotiations of similar agreements (to date inconclusive) with the European Union and the United Kingdom.Footnote 24
In addition to promoting a domestic critical minerals industrial base, the United States has also sought to ensure access to minerals by working with allied countries and trade partners to expand existing, and develop new, mining and processing capacities. The United States has entered into memoranda of understanding and compacts with Argentina, Australia, the Democratic Republic of the Congo, India, Mongolia, Norway, Peru, Uzbekistan, Zambia, and other countries to enhance cooperation on critical minerals.Footnote 25 It has encouraged and provided financial support, to both private investors and foreign governments, for projects abroad, including ones in Angola, Mozambique, South Africa, and Tanzania.Footnote 26 It is working with other developed states in a Minerals Security Partnership to develop cooperatively and responsibly private and public investment in critical minerals supply chains.Footnote 27 Referring to these initiatives, Under Secretary of State for Economic Growth, Energy and the Environment Jose W. Fernandez said that China is seeking to “drive out competition” in critical minerals through ”overproduction and predatory pricing.”Footnote 28 “We reali[z]e,” he continued, that “we can't solve this problem with any one single country, we are stronger together.”Footnote 29
Within the past year and a half, China has increasingly tightened its control over the export of critical minerals. In July 2023, China announced export controls over gallium and germanium, and in October 2023 restrictions were placed on the export of graphite.Footnote 30 Later that year, China prohibited the export of rare earth processing technologies.Footnote 31 In September 2024, China restricted the export of antimony, causing prices to double.Footnote 32 In October, the Chinese government implemented rules that required exporters of rare earth metals to provide the government with information on how they would be used in Western supply chains.Footnote 33 In December, in a move reminiscent of its two-month embargo of rare earth mineral sales to Japan in 2010,Footnote 34 China banned the export of antimony, gallium, germanium, and superhard materials to the United States and imposed a strict licensing requirement for the export of graphite.Footnote 35 It also banned the transshipment of these minerals to the United States from third countries.Footnote 36 More generally, China banned the export of “[d]ual-use items . . . to military users or for military purposes in the United States.”Footnote 37 The ban on gallium and germanium could result in a $3.4 billion decrease in U.S. GDP.Footnote 38
China's most recent action was said to be in retaliation for the Biden administration's announcement, the day before, of new export controls on semiconductor manufacturing equipment, software for the development and production of semiconductors, and high-bandwidth memory, and the addition of more than one hundred Chinese companies to the Commerce Department's Entity List.Footnote 39 The U.S. action extended rules first promulgated in October 2022 (and updated twice since) that seek to impair China's access to high-end semiconductors for military applications.Footnote 40 This was the first time that Chinese critical minerals export controls were directed specifically at the United States and the first time that China imposed such restrictions in direct response to the United States’ imposition of controls on the export of advanced technologies to China. “In recent years, the United States has overstretched the concept of national security, politicized and weaponized economic and technological issues, abused export control measures, arbitrarily restricted the export of relevant products to China, and put a number of Chinese companies on the sanctions list to suppress and contain them,” a Chinese Ministry of Commerce spokesperson said, explaining the reasoning for the export ban.Footnote 41