EU and US nearing critical minerals deal to reduce dependence on China - Media
Kyiv • UNN
The US and the EU plan to set minimum prices for critical minerals. The agreement aims to create supply chains independent of Chinese exports.
The European Union and the United States are nearing an agreement to coordinate the production and supply of critical minerals. The potential agreement would involve creating incentives, such as minimum prices, which could give an advantage to suppliers from countries outside China, according to a draft "action plan" seen by Bloomberg, UNN reports.
Details
The EU and the US will also cooperate in the areas of standards, investment, and joint projects, and will coordinate actions in case of supply disruptions from countries like China.
The two sides are also looking for other "like-minded countries" to join a multilateral agreement that will help create new supply chains for critical minerals used in almost all modern technologies — from missile guidance systems and fighter jets to electric vehicles.
Countries are actively trying to secure access to critical minerals after Beijing imposed extensive export controls last year, including on rare earth elements, in response to US President Donald Trump's tariffs. This disrupted global supply chains and led to production shutdowns in European companies.
Representatives of the US Trade Representative and the European Commission, the EU's executive body, did not respond to requests for comment.
The minerals agreement could be a rare pause in the strained relations between the EU and the US, which have recently become even more complicated after Trump criticized Europeans for insufficient support during his war with Iran. The EU is also delaying the approval of a trade agreement reached with the Trump administration last summer, while the US is still awaiting the bloc's lifting of tariffs on a range of industrial goods.
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The minerals plan has symbolic significance, demonstrating the parties' alignment in their desire to reduce dependence on China for critical materials.
For months, the US and its trading partners have been discussing the need to develop a rare earth and critical minerals industry protected from cheap Chinese competition. Currently, China processes over 80% of the world's rare earth elements.
Although the countries have not yet agreed on specific mechanisms for implementing a common policy — including minimum prices for each mineral, subsidies, and procurement guarantees — the EU-US plan is to be supplemented by a similar agreement with Mexico, indicating long-term intentions.
According to an unsigned memorandum of understanding, also seen by Bloomberg, the EU-US partnership will cover "critical minerals across the entire value chain and life cycle," including exploration, extraction, processing, refining, recycling, and reuse.
Joint public procurement, cooperation on export restrictions, stockpiling, and mapping of mineral resources are also envisioned.
The documents are currently being reviewed by EU member states and may still be subject to change, sources note.