US wants to create a critical minerals trading bloc with its allies to
counter China
[February 05, 2026] By
DIDI TANG, JOSH FUNK and MATTHEW LEE
WASHINGTON (AP) — The Trump administration announced Wednesday that it
wants to create a critical minerals trading bloc with its allies and
partners, using tariffs to maintain minimum prices and defend against
China’s stranglehold on the key elements needed for everything from
fighter jets to smartphones.
Vice President JD Vance said the U.S.-China trade war over the past year
exposed how dependent most countries are on the critical minerals that
Beijing largely dominates, so collective action is needed now to give
the West self-reliance.
“We want members to form a trading bloc among allies and partners, one
that guarantees American access to American industrial might while also
expanding production across the entire zone,” Vance said at the opening
of a meeting that Secretary of State Marco Rubio hosted with officials
from several dozen European, Asian and African nations.
The Republican administration is making bold moves to shore up supplies
of critical minerals needed for electric vehicles, missiles and other
high-tech products after China choked off their flow in response to
President Donald Trump’s sweeping tariffs last year. While the two
global powers reached a truce to pull back on the high import taxes and
stepped-up rare earth restrictions, China’s limits remain tighter than
they were before Trump took office.
The critical minerals meeting comes at a time of significant tensions
between Washington and major allies over President Donald Trump’s
territorial ambitions, including Greenland, and his moves to exert
control over Venezuela and other nations. His bellicose and insulting
rhetoric directed at U.S. partners has led to frustration and anger.
The conference, however, is an indication that the United States is
seeking to build relationships when it comes to issues it deems key
national security priorities.
While major allies like France and the United Kingdom attended the
meeting in Washington, Greenland and Denmark, the NATO ally with
oversight of the mineral-rich Arctic island, did not.
A new approach to countering China on critical minerals
Vance said some countries have signed on to the trading bloc, which is
designed to ensure stable prices and will provide members access to
financing and the critical minerals. Administration officials said the
plan will help the West move beyond complaining about the problem of
access to critical minerals to actually solving it.
“Everyone here has a role to play, and that’s why we’re so grateful for
you coming and being a part of this gathering that I hope will lead to
not just more gatherings, but action,” Rubio said.
Vance said that for too long, China has used the tactic of unloading
materials at cheap prices to undermine potential competitors, then
ratcheting up prices later after keeping new mines from being built in
other countries.
Prices within the preferential trade zone will remain consistent over
time, the vice president said.
“Our goal within that zone is to create diverse centers of production,
stable investment conditions and supply chains that are immune to the
kind of external disruptions that we’ve already talked about,” he said.
In Beijing, Chinese Foreign Ministry spokesperson Lin Jian said in
response to a question about the trading bloc that “we oppose any
country undermining the international economic and trade order through
rules set by small cliques.”
To make the new trading group work, it will be important to have ways to
keep countries from buying cheap Chinese materials on the side and to
encourage companies from getting the critical minerals they need from
China, said Ian Lange, an economics professor who focuses on rare earths
at the Colorado School of Mines.
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Vice President JD Vance steps away from the podium after speaking at
the Critical Minerals Ministerial meeting at the State Department,
Wednesday, Feb. 4, 2026 in Washington. (AP Photo/Kevin Wolf)
 “Let’s just say it’s standard
economics or standard behavior. If I can cheat and get away with it,
I will,” he said.
At least for defense contractors, Lange said the
Pentagon can enforce where those companies get their critical
minerals, but it may be harder with electric vehicle makers and
other manufacturers.
US turns to a strategic stockpile and investments
Trump this week also announced Project Vault, a plan for a strategic
U.S. stockpile of rare earth elements to be funded with a $10
billion loan from the U.S. Export-Import Bank and nearly $1.67
billion in private capital.
In addition, the government recently made its fourth direct
investment in an American critical minerals producer, extending $1.6
billion to USA Rare Earth in exchange for stock and a repayment
deal. The Pentagon has shelled out nearly $5 billion over the past
year to spur mining.
The administration has prioritized the moves because China controls
70% of the world’s rare earths mining and 90% of the processing.
Trump and Chinese President Xi Jinping spoke by phone Wednesday,
including about trade. A social media post from Trump did not
specifically mention critical minerals.
Heidi Crebo-Rediker, a senior fellow in the Center for Geoeconomic
Studies at the Council on Foreign Relations, said the meeting was
“the most ambitious multilateral gathering of the Trump
administration.”
“The rocks are where the rocks are, so when it comes to securing
supply chains for both defense and commercial industries, we need
trusted partners,” she said.
Japan’s minister of state for foreign affairs, Iwao Horii, said
Tokyo was fully on board with the U.S. initiative and would work
with as many countries as possible to ensure its success.
“Critical minerals and (their) stable supply is indispensable to the
sustainable development of the global economy,” he said.
Agreements and legislation move forward
The European Union and Japan together as well as Mexico announced
agreements to work with the United States to develop coordinated
trade policies and price floors to support the development of a
critical minerals supply chain outside of China. The countries said
they would develop an agreement about what steps they will take and
explore ways to expand the effort to include additional like-minded
nations.
Also Wednesday, the Republican-controlled House approved a bill to
accelerate mining on federal land despite objections from Democrats
and conservation groups that it amounted to a blank check to
foreign-owned mining corporations.
The bill, which next heads to the Senate, would codify Trump’s
executive orders to boost domestic mining and processing of minerals
important to energy, defense and other applications.
___
Associated Press writers Matthew Daly and Ken Moritsugu in Beijing
contributed to this report.
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