Critical Minerals in the Crosshairs: Navigating U.S. Supply Chain Policy and Global Competition
Dependence on foreign countries for many of the critical minerals the U.S. needs for national security, energy, technology, manufacturing, and other essential sectors has created significant supply chain vulnerabilities for the U.S. The Trump administration is attempting to address these vulnerabilities through a series of actions designed to bring more domestic mining projects online and secure trade agreements for the minerals and metals the U.S. needs. Companies that are consumers of critical minerals must consider how new trade dynamics could impact sourcing and supply and ensure they are well positioned to minimize supply chain risks and capitalize on opportunities.
Processed critical minerals, including rare earth elements, cobalt, nickel, and other elements vital to advanced technologies, are essential inputs across all 16 U.S. critical infrastructure sectors, from defense and communications to energy and transportation. These minerals underpin advanced weapons systems, battery technologies, fiber-optic networks, and a wide range of industrial and consumer applications.
The U.S. does not currently have a reliable, end-to-end domestic supply chain for processed critical minerals, nor one for many downstream products. The U.S. is 100 percent reliant on imports for 16 critical minerals like graphite and titanium, and it is at least 50 percent reliant on imports for 50 additional nonfuel minerals.[1]
In contrast, China has spent the past several decades pursuing a state-backed strategy to dominate the global supply chain for critical minerals by investing heavily in mining, refining, and downstream processing both domestically and globally. Today, China produces 70 percent of the world’s rare earths and holds 90 percent of the world’s processing capacity for rare earths.[2]
In contrast to China’s position, U.S. domestic production and processing capacity for many critical minerals has declined over the past 30 years. Despite efforts to fast-track permitting for new mines, American miners will continue to need to ship most of their concentrates to foreign refineries for processing. This dependency presents strategic risks not only for U.S. national defense capabilities, but also for other key industries as well, including artificial intelligence, semiconductors, advanced manufacturing, electric vehicles, and renewable energy, among other technologies and sectors where critical minerals are indispensable.
The Trump Administration’s Response
President Trump issued a Section 232 presidential proclamation in mid-January 2026 directing senior U.S. officials to negotiate agreements with trading partners to address national security vulnerabilities linked to the import of processed critical minerals and their derivative products (PCMDPs).[3] The proclamation followed a formal Section 232 investigation by the U.S. Department of Commerce that found current import conditions pose a threat to U.S. national security due to over-reliance on foreign sources, limited domestic processing capacity, and supply chain vulnerabilities.[4]
Authorized by the Trade Expansion Act of 1962, Section 232 investigations assess the impact of specific imports on U.S. national security. However, unlike some past investigations that immediately resulted in tariffs, this proclamation initially emphasized negotiation over tariffs — directing the U.S. Commerce Secretary and U.S. Trade Representative to pursue agreements that mitigate vulnerabilities and ensure adequate domestic supplies and processing capacity. This is a sharp deviation from the administration’s other trade policies, where the U.S. has imposed stringent restrictions on its allies. With respect to critical minerals, the administration is seeking to convene like-minded partners to help diffuse concentrated supply chains. The U.S. Trade Representative is also “[seeking] public comment on trade policies necessary to increase the domestic availability of mined, refined, and processed critical minerals.”[5]
Current negotiations under Section 232 have focused on developing price floors, which would provide companies and investors with adequate returns and protection against predatory and incumbent producers flooding the market to hinder competition. U.S. Treasury Secretary Scott Bessent convened finance ministers from allied nations to launch the negotiations on January 12.[6] Three weeks later, U.S. Secretary of State Marco Rubio hosted a second round of talks in Washington.[7] If negotiations do not yield satisfactory results within a set timeframe (e.g., 180 days), the proclamation allows for future consideration of trade remedies, including price protections or tariffs on specific critical minerals.[8]
Since coming back into office, the Trump administration has also issued a flurry of executive orders intended to fast-track permitting to increase domestic production and alleviate the decades-long permitting lag that has plagued the critical minerals industry. The administration has also unveiled Project Vault, a roughly $12 billion initiative to build a strategic stockpile of rare-earth and other critical minerals such as lithium and nickel to shield U.S. industries from supply disruptions and blunt China’s dominance in processing these materials.[9]
What This Means for Industry
Companies across the manufacturing, energy, defense, and technology sectors should treat critical mineral policy as both a risk vector and a strategic opportunity. Industries reliant on imported processed minerals may face:
- Supply disruptions including limited or no available supply, as well as price volatility and price premiums for products that are on China’s restricted export list;
- Regulatory changes impacting sourcing and compliance;
- Shifts in international trade dynamics; and
- Potential incentives for domestic processing and investment.
Companies must position themselves to minimize supply chain risks and capitalize on opportunities. This requires strategic planning to mitigate risks associated with evolving geopolitics, as well as clear actions designed to capture opportunities as they emerge.
Looking through the lenses of public affairs and issues management, as well as supply chain strategy and change management, companies should navigate the critical mineral policy landscape with the following strategic considerations:
- Supply Chain Mapping & Resilience Planning
Securing domestic supply chains will not happen overnight. Assess your exposure to imported critical minerals and increase visibility with upstream and downstream supply chain partners. Mapping dependencies will enable you to inform scenario planning and mitigate risk.
- Engagement with Policymakers & Trade Authorities
Engage in active dialogue with federal agencies, allied governments, and industry associations to help shape negotiation outcomes and allow you to access initiatives aimed at supply diversification or domestic production.
- Operational & Investment Strategy Alignment
Evaluate making strategic investments in domestic processing, joint ventures, or participate in global alliances that align with U.S. policy goals and broader industrial resilience strategies.
- Stakeholder Communications
Clearly and proactively communicate with non-governmental stakeholders, including investors, partners, and customers, regarding your strategy for supply chain resilience and alignment. This will strengthen confidence in your position and improve your market positioning, potentially creating a competitive advantage.
Conclusion
Recent critical minerals policy developments underscore a growing intersection between trade policy, national security, and industrial strategy. Companies that are consumers of critical minerals that understand, adapt to, and proactively engage on these dynamics will be better positioned to manage risk and capitalize on strategic opportunities as the policy landscape continues to evolve.
References
[1] https://apps.usgs.gov/critical-minerals/mineral-commodities-2026.html
[2] https://www.nytimes.com/2025/06/03/business/rare-earth-metals-china.html
[7] https://x.com/StateDept/status/2013597378968986059
[8] Trump administration directs negotiations on critical minerals imports under section 232
[9] Trump Administration to Create $12 Billion Rare-Earth Stockpile to Counter China – WSJ
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