The US president and Japanese prime minister signed a framework agreement today in Japan to secure the supply of critical minerals and rare earths, the White House announced. The agreement, signed during Trump’s visit to Tokyo as part of his Asia tour, aims to strengthen the resilience and autonomy of supply chains in a sector hitherto dominated by China.
Counterweight to Chinese influence on rare earths
They are a critical component for a host of technologies, from renewable energy and electric vehicles to advanced electronics and defense systems. China processes over 90% of the planet’s rare earths, which gives it a significant geo-economic advantage. Beijing’s announcement of new controls on technology exports related to this strategic sector has raised concerns in Washington, Tokyo and Brussels.
The new Trump-Takaichi deal seeks to act as a bulwark to this dependence, with the two countries pledging to accelerate joint investment and mining and processing programs to develop “diverse, highly liquid and fair markets” for the critical minerals, as the US presidency puts it.
Coordinated investments and removal of bureaucratic obstacles
The U.S. and the U.S. have agreed to leverage economic policy tools to fund projects that will boost production and processing of critical materials. At the same time, they pledged to move forward with reforms that will simplify timelines and permitting processes for mining projects, while tackling non-market policies and unfair trade practices that distort competition.
Washington, which currently has just one active rare earth mine, is scrambling to secure access to critical minerals needed for the electric vehicle industry, defense technology and advanced manufacturing. Japan, for its part, is seeking to reduce its long-term dependence on Chinese raw materials while promoting its technological self-reliance.
To create strategic stocks and international partnerships
According to the White House, the two countries will consider building mutual stockpiles of critical minerals to ensure sufficiency during periods of market volatility. At the same time, they will seek collaborations with other international partners, including countries in the Indo-Pacific and Europe, to create a multilateral security logistics network.
The signing of the agreement is part of a wider framework of restructuring of the global geoeconomy, where access to high-tech raw materials is transformed into a tool of strategic power. Trump is expected to meet with Chinese President Xi Jinping tomorrow, with the issue of rare earths high on their agenda.
