US floats new critical minerals trading bloc: Can Trump break China’s rare earth monopoly? | World News

Washington: The United States has unveiled plans for a proposed critical minerals trading bloc, in a coordinated move with allies to loosen China’s grip on the global rare earth industry and secure long-term access to materials important to modern economies.

Speaking at a meeting attended by foreign ministers at the US State Department on Wednesday, February 4, Vice President JD Vance said that the trade friction experienced last year revealed how dependent the world is on critical minerals controlled by China. The proposed bloc will bring together allied and partner countries to align supply, pricing and production strategies.

He said he wants U.S. allies and partner countries to come together in a trade bloc that would provide America with access to its industrial base while also expanding mineral production among participating countries.

Vance described the initiative as a rare opportunity for countries facing similar vulnerabilities to act collectively. This presents an opportunity for self-reliance, he said, where countries will only need to depend on each other for the critical minerals needed to support their industries and sustain growth.

China currently accounts for approximately 70 percent of global rare earth mining. This gives Beijing control over everyday technologies such as smartphones and cars, as well as defense systems and materials used in advanced manufacturing.

The United States ranks a distant second in rare earth mining with only 12 percent, leaving a huge gap to close. As a result, President Trump spent much of 2025 meeting with leaders from Ukraine, Australia, Japan, and countries in Central and Southeast Asia to negotiate trade deals aimed at securing access to rare earths and critical minerals. This was an effort to give the United States a better chance to compete with China.

Vance returned to this topic at the opening of the meeting hosted by Secretary of State Marco Rubio, saying: “I think many of us learned the hard way last year just how dependent our economies are on these critical minerals.”

Officials from dozens of European, Asian and African countries attended the discussions in Washington, as well as delegations from South Korea, India, Thailand, Japan, Germany, Australia and the Democratic Republic of Congo.

The diplomatic move comes at a time of rising tensions between Washington and some of its traditional allies, especially after President Donald Trump’s unwelcome comments about seizing Greenland from Denmark. This problem created anxiety in NATO capitals.

Denmark went on high alert and many NATO countries sent troops to Greenland to reinforce and fortify the area. This move is significant because it has offended many traditional US allies and partners and caused unease in relations involving the US.

Despite this environment, the White House continued to pursue its mining agenda. On Monday, officials announced plans to build a new government reserve of important materials under an initiative called Project Vault.

Vance’s remarks came after Trump had what he described as an “excellent” phone call with Chinese President Xi Jinping, although it is unclear whether the proposed bloc was discussed.

He said Washington, along with the trading bloc, was preparing to implement a pricing floor for critical minerals. The move is intended to encourage private investment in mining and processing projects that are struggling to compete with low-cost Chinese supplies.

If implemented, this approach could impact global supply chains for materials needed for electric vehicles, semiconductors and defense systems. It could also increase costs for manufacturers in the near term and add new tensions to already strained U.S.-China trade relations.

China’s stricter rules on rare earth exports last year caused delays and temporary closures at auto factories in Europe and the United States. At the same time, an increase in low-priced lithium supplies from China has slowed the expansion plans of domestic producers in the United States.

Responding to questions about the Washington meeting, China’s embassy in the US told Reuters: “China has long played an important and constructive role in keeping global industrial and critical minerals supply chains safe and stable, and is willing to continue to make active efforts in this regard.”

China’s influence was also evident in October, when Trump agreed to reduce tariffs on Chinese goods after Beijing promised to halt tighter restrictions on rare earth exports.

Wednesday’s talks underscore a broader U.S. effort to coordinate policy tools with partners to counter China’s dominance of critical minerals, even as Trump’s sweeping “America First” tariff agenda continues to irritate allies.

As Washington moves ahead with the proposed bloc, the debates highlight how underground buried mines have become a central front in global trade, industrial security and geopolitical competition.