US to Push Faster Action to Cut China’s Rare-Earth Dependence
Synopsis
Scott Bessent hosted a meeting of G7 finance ministers aimed at accelerating efforts to reduce reliance on China for rare earths and other critical minerals. The discussions involved countries accounting for roughly 60 per cent of global demand and reflected growing urgency following the G7 summit in Canada. The United States has pointed to an $8.5 billion critical minerals agreement with Australia as a key step in building alternative supply chains. The push comes amid tighter Chinese export curbs on rare-earth magnets and related moves by Japan affecting certain military-linked items. Under the Donald Trump administration, Washington also sought to boost domestic production and secure supplies through arrangements with Ukraine. “There is a clear need to move faster,” a US official said.
Scott Bessent urged G7 nations and partner countries to step up efforts to reduce their dependence on Chinese-supplied critical minerals while hosting 12 senior finance officials in Washington. The meeting brought together representatives from the G7, the European Union, Australia, India, South Korea, and Mexico, which together account for around 60 per cent of global demand for critical minerals. Urgency dominated the discussions, with a senior US official saying participants agreed the group needed to move faster. Bessent also raised the issue in a separate meeting, following commitments made at the G7 leaders’ summit in Canada in June to advance an action plan.
G7 Meeting Urgency
US Treasury Secretary Scott Bessent continued his push over the weekend, hosting finance ministers for dinner on Sunday before formal meetings on Monday. Behind closed doors, officials voiced frustration that momentum has slowed since the G7 summit in Canada, despite fresh presentations and commitments. A US statement is expected from the talks, though diplomats say a joint action plan is unlikely. “The United States is bringing partners together and showing leadership, and we are ready to move with those prepared to act quickly,” a US official said. The Trump administration has also stepped up efforts at home, boosting domestic production and striking supply agreements with producers in Australia and Ukraine. Officials say progress is being made, even as they concede the problem is far from solved.
Australia Deal And China Tensions
A deal struck between the United States and Australia in October is shaping the next phase of efforts to loosen China’s grip on critical minerals. The agreement lays out an $8.5 billion pipeline of projects, drawing on Australia’s strategic reserves of rare earths and lithium. Canberra is now looking to widen the circle, exploring cooperation with Europe, Japan, South Korea, and Singapore. The backdrop is a tightening trade environment: China has curbed exports of rare-earth magnets, while Japan has restricted shipments of certain dual-use military goods. Officials say more meetings are planned before decisions are finalised. For now, China’s existing commitments on soybeans and some critical minerals remain unchanged.
Global Supply Chain Push
China’s grip on rare-earth magnets runs deep. The materials are essential for everything from fighter jets to submarines, with a single F-35 requiring about 900 pounds and a submarine consuming nearly ten times that amount. When tariffs imposed under the Trump administration reshaped trade ties, Beijing responded by tightening export controls, sharpening concerns in Washington. The Pentagon has since pushed to rebuild a domestic supply chain, but options remain limited. For now, a single company, MP Materials in California, anchors US production. Lawmakers from both parties have rolled out funding and policy support, arguing the issue cuts across politics. Within the G7, leaders say securing supply chains is about more than security; it is also about economic resilience. Japan, facing similar risks, is already scouring overseas markets for alternatives.
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