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America’s rivalry with China and its push for independent critical mineral supply chains may hurt the US economy in the short term, challenging its current global dominance
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On March 20, 2025, President Trump invoked emergency provisions under Section 301 of Title 3 of the United States Code to pass an executive order (EO) to boost domestic critical mineral production (including mining, processing, refining, and smelting) and reduce American reliance on foreign sources. Critical minerals lie at the foundation of modern civilization as we know it today. Though semiconductors may serve as the building blocks for most current technologies, the raw materials for their development hinges on the availability of minerals like silicon, gallium, and germanium. While China managed to establish itself as a dominant player in semiconductor supply chains, the situation is even more acute when it comes to critical minerals. The burgeoning technology war between the United States (US) and China, gaining traction under President Trump, has prompted the former to pursue alternate avenues for procuring and processing critical minerals, an endeavour which is likely to have significant consequences for the American economy as well as global geopolitics.
While China managed to establish itself as a dominant player in semiconductor supply chains, the situation is even more acute when it comes to critical minerals.
The EO refers to the 50 minerals listed under the Critical Minerals List (CML) compiled by the United States Geological Survey (USGS) in 2022. In addition, it includes uranium, copper, potash, gold, and any other material designated by the Chair of the recently established National Energy Dominance Council (NEDC) as critical in the future. Furthermore, the EO elicits the agency of multiple departments including the Department of Defense, the Department of the Interior, the Department of Agriculture and the Department of Energy, to expedite the development of mineral projects, while canvassing and streamlining related issues like land use and capital investment (both public and private), and setting stringent timelines (from 10 to 45 days) for each. It further enshrines these departments with the appropriate authority to achieve said goals.
The US push for critical minerals should not come as a surprise. It is a natural consequence of the country’s recent attempts at decoupling its technology supply chains from China and part of its strategic push to diminish China’s growing technological capabilities while simultaneously enhancing its own. Critical minerals supply the raw materials for essential technologies like semiconductors, clean energy technologies (including electric vehicles (EVs) and solar panels), and defence equipment. The US is heavily dependent on China for most critical minerals since the latter not only produces (60 percent) but also processes (85 percent) the majority of the global critical mineral supply. For instance, from 2020-23, the US imported at least 19 mineral commodities from China. However, as a response to American export controls on critical technologies, China has implemented its own export controls and bans against the US on critical minerals including processing technologies.
The US is heavily dependent on China for most critical minerals since the latter not only produces (60 percent) but also processes (85 percent) the majority of the global critical mineral supply.
For instance, in response to the Biden administration’s curb on semiconductor technology to China in December 2024, China banned shipments of gallium, germanium, and antimony to the US, all of which are crucial for the development of semiconductor supply chains and defence technologies. It had also announced similar restrictions on the export of graphite in October 2024, another crucial mineral required for developing EV batteries. In February 2025, China further announced export controls on Tungsten, Indium, Bismuth, Tellurium, and Molybdenum, in response to Trump’s imposition of an additional 10 percent tariff on Chinese goods into the US.
The attempt to establish critical mineral supply chains independent of China is a bipartisan issue in the US, not necessarily instigated by Trump or the Republican Party. For instance, the Infrastructure Investment and Jobs Act (2021), the Inflation Reduction Act (2022) and the invocation of the Defense Production Act (2022), all passed during the Biden administration, had included significant provisions to accomplish this goal, alongside a host of other initiatives, and represent the ongoing attempt by the US to do so.
In addition to boosting domestic production of critical minerals, the US has also been attempting to acquire them through international collaboration and negotiation. After signing the US-Norway Critical Minerals Memorandum of Cooperation in 2024, the US Department of Commerce and the Norwegian Ministry of Trade, Industry, and Fisheries, jointly released a report on “Non-Market Policies and Practices in the Critical Minerals Sector” in January 2025. Subsequently, in February 2025, the US and Ukraine initiated a negotiation on a first-of-its-kind bilateral agreement to establish a reconstruction investment fund with Ukraine contributing 50 percent of all revenues earned from the future monetisation of all government-owned natural resource assets including mineral deposits.
The attempt to establish critical mineral supply chains independent of China is a bipartisan issue in the US, not necessarily instigated by Trump or the Republican Party.
When it comes to Greenland, though America’s intention to acquire it may be an issue rooted in history, it cannot be argued that it would be extremely beneficial for the US from the point-of-view of critical minerals, given the country’s abundant and largely pristine mineral reserves. Additionally, Trump has also expressed an interest in acquiring minerals from Canada and even Russia.
The most ambitious attempt at international collaboration by the US is through the Mineral Security Partnership (MSP) announced in 2022, a partnership between 14 countries including India, meant to catalyze public and private investment in responsible critical minerals supply chains globally. This was followed by the announcement of the MSP Finance Network in September 2023, established with the intent of strengthening cooperation and promoting information exchange and co-financing among participating institutions to advance diverse, secure, and sustainable supply chains for critical minerals.
Critical minerals serve as the lifeline for modern civilisation, with the US firmly planted as its current pinnacle. However, resuming its position as such while decoupling its technology supply chains from China was always bound to be an arduous task. While setting up independent technology supply chains poses a significant dilemma on its own, establishing critical mineral supply chains presents an even more monumental challenge. Attempting to accomplish both simultaneously is likely to take a toll on an already dwindling US economy, at least in the short run.
For instance, Chinese exports of gallium and germanium to the US have declined by 97-100 percent between 2022 and 2024. The US has been able to meet its requirements for both minerals primarily through backdoor channels and reexports from countries like Belgium and Germany. However, the December 2024 export bans by China will likely inhibit this. The USGS has estimated such a total ban could cause a 150 percent increase in price for gallium and a 26 percent increase for germanium and constrain supply, leading to a US$3.4 billion decrease in US Gross Domestic Product (GDP). Additionally, in light of US technology initiatives like the CHIPS and Science Act and the recently announced US$500 billion Stargate Project, the demand for critical minerals is poised to go up even further. Critical mineral supply chain disruptions will have a cascading effect across virtually every technology supply chain including semiconductors, AI chips, EVs and defence technologies, influencing not just the US, but also its close NATO allies who are pursuing their technology initiatives such as the EU Chips Act. Even if the US can resist supply chain shocks, what will be the case in the case of its EU allies? Will they continue their alignment with the US or perhaps seek novel arrangements?
In light of US technology initiatives like the CHIPS and Science Act and the recently announced US$500 billion Stargate Project, the demand for critical minerals is poised to go up even further.
Both domestic and international attempts at strengthening critical mineral supply chains present their own share of challenges. The US has the second-longest timeline to build a new mine, an average of 29 years. Despite all its recent attempts, boosting domestic mining substantially is still a long-term endeavour. Setting up mines through international collaborations like the MSP will also require time due to issues such as complying with environmental, social and governance (ESG) standards as well as human rights and labour laws.
Consequently, in addition to government support and investment, building critical mineral supply chains will require active private sector involvement, scientific innovation like deep sea mining and developing alternative energy sources, and international collaboration through initiatives like the MSP. American hegemony is on the line. It is up to the Trump administration to find its way through administrative and diplomatic caveats, while redeeming the US economy and maintaining the country’s leadership in global geopolitics.
Prateek Tripathi is a Junior Fellow at the Centre for Security, Strategy and Technology, at the Observer Research Foundation
The views expressed above belong to the author(s). ORF research and analyses now available on Telegram! Click here to access our curated content — blogs, longforms and interviews.
Prateek Tripathi is a Junior Fellow at the Centre for Security, Strategy and Technology. His work focuses on emerging technologies and deep tech including quantum technology ...
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