G7 leaders tackle reliance on China for critical minerals
Written by: Julia Payne, John Irish and Michel Rose
EVIAN-LES-BAINS, France, June 17 (Reuters) – France, which hosts the G7, pressed its partners on Wednesday to agree on a statement on critical minerals that could include measures to help the West reduce its dependence on China and protect investors from countermeasures and dumping, diplomats said.
Leaders will discuss securing mineral supply chains, a central theme of France’s G7 presidency, alongside a broader effort to address global economic imbalances on the final day of the summit in Evian-les-Bains, June 15-17.
China spooked the global economy last year when some industries came to a near halt after Beijing imposed export restrictions on permanent magnets made from rare earths; This incident highlighted how dependent Western supply chains in the energy, defense and technology sectors are on these goods.
“We are negotiating important texts on critical minerals and, as a result, economic sovereignty,” a French presidential official said ahead of the summit. he said.
Measures discussed in recent months include price supports, market standards, subsidies and guaranteed purchases, as well as tools to increase private investment in critical mineral supply chains outside China. However, the measures announced at the G7 are likely to be the first steps.
OVERCONFIDENCE IN CHINA
The 2025 restrictions were the latest in Beijing’s gradual tightening of exports of niche materials and battery metals. It also restricted American companies’ access to tungsten and antimony, among others.
Western powers are racing to secure extraction from mines and develop processing and recycling capacity, but it will take years to collapse China’s dominant position, which has been developing for decades.
The United States has proposed a trading bloc for critical minerals in early 2026. But countries are at odds over how this bloc can function, especially in the context of the White House’s “America First” agenda.
ECONOMIC IMBALANCES
G7 leaders will also discuss how to rebalance global trade and address “predatory competition”, particularly from China. France summarizes the imbalances as follows: China produces too much, the USA consumes too much, Europeans invest too little.
There is growing alarm in Europe over China’s record trade surplus and move up the value chain; analysts describe this as the “second China shock” following China’s dominance of low-value industries in the 2000s.
French President Emmanuel Macron tried to engage China before the summit as a last resort for cooperation. Beijing rejects EU allegations of unfair subsidies and has repeatedly promised “strong” countermeasures against the EU’s proposed “Buy from Europe” proposal and revised technology sovereignty rules.
EU leaders will discuss separately, at a summit in Brussels on Thursday, a tougher and more systematic use of trade defense measures against China’s rising imports.
The EU recorded its largest ever trade deficit with China last year, at over €360 billion.
“This is of course not sustainable. As you know, our strategy in Europe is very clear: not to decouple, but to reduce risk,” European Commission President Ursula von der Leyen told reporters at the start of the summit.
G7 leaders will also discuss artificial intelligence at lunch on Wednesday, including the responsibilities of bots and agents and how AI presents what is right and wrong. OpenAI founder Sam Altman and Anthropic CEO Dario Amodei are expected to attend the lunch.
(Reporting by Julia Payne; Editing by Sanjeev Miglani)
