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US President Donald Trump has signed an executive order to initiate an investigation into critical minerals, potentially leading to additional tariffs on industrial resources. The move follows recent probes into chip and pharmaceutical imports, signalling a further broadening of the global trade war.<\/p>\n
The investigation, under Section 232 of the Trade Expansion Act of 1962, aims to \u201cdetermine the effects on national security of imports of processed critical minerals and their derivative products,\u201d according to the official document. \u201cCritical minerals, including rare earth elements, in the form of processed minerals are essential raw materials and critical production inputs required for economic and national security.\u201d The same law was previously used by Trump to impose 25% tariffs on steel and aluminium, as well as to launch a probe into copper imports.<\/p>\n
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Last month, the president signed an executive order to boost domestic production of critical minerals by invoking the Defence Production Act, providing support such as financing and loans to the sector. The measure is widely seen as targeting China, which dominates the global supply chain.<\/p>\n
Trump\u2019s strategic approach to leverage US power in the trade war with China<\/p>\n
According to the White House, the US relies on imports of 15 critical minerals, 70% of which originate from China. Last Friday, Beijing announced export restrictions on a wide range of critical minerals, such as germanium, gallium, antimony, and magnets, in response to Trump\u2019s sharp tariff hikes.<\/p>\n
The US has only one rare earth mine and no domestic smelters, leaving it heavily reliant on China for natural resources, including rare earths and critical minerals\u2014vital components in electric devices, battery-powered vehicles, aircraft, and defence equipment. A TD Economics report reveals that China dominates the global production of more than half of the 50 critical minerals identified by the US government in 2022. It also maintains a near-monopoly in refining, processing 90% of global rare earth elements. To strengthen its hand in the trade war, the US will need to diversify sourcing of these industrial materials.<\/p>\n
\u201cProcessed critical minerals and their derivative products face significant global supply chain vulnerabilities and market distortions due to reliance on a small number of foreign suppliers,\u201d Tuesday\u2019s investigation document states, \u201cThe dependence of the United States on imports and the vulnerability of our supply chains raises the potential for risks to national security, defence readiness, price stability, and economic prosperity and resilience.\u201d<\/p>\n
In February, Trump demanded $500 billion (\u20ac442 billion) worth of Ukraine\u2019s rare earth and critical minerals as part of peace talks, a move also seen as a strategic effort to enhance the US\u2019s position against China.<\/p>\n
Market responses<\/p>\n
Australia\u2019s major mining stocks fell during Wednesday\u2019s Asian session, with shares of BHP falling 1.2%, Rio Tinto sliding 2.3%, and Phibara Minerals dropping 2.9% as of 5:52 am CEST. In commodities, iron ore (CFR China) futures on the SGX declined 0.35%, while copper futures fell 0.91%.<\/p>\n
The downturn in the resource sector may also be linked to reports that Nvidia is facing new US export restrictions to China, which could cost the tech giant billions of dollars. These fresh regulations are expected to dampen demand for industrial resources such as copper and certain critical minerals used in chip manufacturing. Combined with Trump\u2019s latest probe, the news has contributed to broader market weakness.<\/p>\n
European markets may soon feel the ripple effects of the intensifying global trade war, with stock futures pointing to a lower open across major indices.<\/p>\n","protected":false},"excerpt":{"rendered":"ADVERTISEMENT US President Donald Trump has signed an executive order to initiate an investigation into critical minerals, potentially…\n","protected":false},"author":2,"featured_media":25295,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[32,12,479,15518,26],"class_list":{"0":"post-25294","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-world","8":"tag-donald-trump","9":"tag-news","10":"tag-tariffs","11":"tag-trade-agreement","12":"tag-world"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/114348786005717255","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/25294","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=25294"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/25294\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/25295"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=25294"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=25294"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=25294"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}