The U.S. president is coercing its allies to coordinate the policies related to critical minerals to weaken China’s influence in the global market and create a more “safe and reliable” supply chain for the United States.
Resource security is crucial to a country’s economic development and strategic stability. The global allocation and utilization of resources is profoundly shaped by the political, economic and diplomatic policies of various countries. For China and the United States, resource competition extends beyond economic interests to encompass technology, diplomacy and geopolitics.
During Donald Trump’s first term and throughout the Biden administration, Washington’s strategic competition with China continued to intensify across multiple fields, including economy, trade, science, technology and the military. Resources, a crucial pillar for the national economy and national security, have become a key domain of their rivalry.
Now, in his second term, Trump’s resource diplomacy — one part of his overall strategic approach to China — threatens to intensify their competition. Trump’s central goal is to put America first by prioritizing U.S. economic interests and national security. This strategic adjustment will inevitably have an important impact on the resource security of other countries, especially China.
In fact, as early as the beginning of his second term, Trump showed great interest in Greenland, which has rich natural resources, including oil, natural gas and more than 38 million tons of rare earth oxides. As their rivalry escalates, China and the United States now find themselves competing directly for critical minerals, particularly those crucial to emerging strategic industries.
For example, China is the world’s largest producer of rare earths and a leading importer of natural resources. It currently faces the dual challenges of intensified geopolitical competition and growing risks to supply chain security. It dominates the global rare earth industry. While its reserves account for 34 percent of the world’s total, it contributes 92 percent of global refined output. In contrast, the United States is the world’s largest importer of rare earths, with 80 percent of its supply coming from China and largely directed toward the military.
According to the U.S. Geological Survey’s list of 50 critical minerals, 12 come exclusively from imports while about half of 29 others are imported. Notably, China is the largest producer of 29 of these key minerals.
In recent years, the United States has worked to integrate its mineral supply chain through the United States-Mexico-Canada Agreement, and has accelerated the construction of rare earth facilities. Although China controls 92 percent of the world’s rare earth refining capacity, the Trump administration aims to change the balance. For example, it wants to obtain 60 percent of the cobalt mining rights in the Democratic Republic of the Congo (through a minerals-for-security agreement), and to build a multilateral supply chain together with Australia, Japan and other allies.
Through these efforts, the U.S. seeks to extend its strategic reach to resource-rich countries such as the DRC and Indonesia, form a multilevel mineral security architecture and ultimately reduce its dependence on China’s rare earths to below 40 percent by 2030.
As a key raw material for the new-energy industry, lithium is now strategically important. Known as the Lithium Triangle, South America is home to the largest estimated reserves in the world, and here China-U.S. competition for lithium mines is particularly fierce. While Washington tries to strengthen its control over local lithium resources through political and economic means, China, by leveraging its advanced mining technology, comprehensive industrial chain and favorable cooperation policies, has engaged in extensive mining cooperation with Argentina, Chile and other countries.
To build a “de-Sinicized” supply chain, former U.S. President Joe Biden established a multilayered and interconnected alliance focused on critical minerals. Building on his efforts, Trump has advanced the coordination of critical mineral policies within U.S. alliances through coercive means, including diplomatic pressure, economic coercion and tariff policies. The aim is to weaken China's influence in the global critical minerals market and create a more “safe and reliable” supply chain for the United States in the following ways:
• Promoting “transactional diplomacy.”
Trump has sought to gain control over other countries’ critical minerals through various political means. In May this year, the United States and Ukraine signed a strategic mineral cooperation agreement that requires Ukraine to pay for U.S. military aid with its rare earths and mining rights in the Donbas region valued at $500 billion.
Despite President Volodymyr Zelenskyy’s initial resistance, Washington exerted pressure by suspending $1.2 billion in aid and eventually forced Kyiv to agree to establish a “U.S. capital first” mining mechanism and a U.S.-Ukraine reconstruction investment fund.
• Strengthening resource diplomacy and protectionism.
Trump regards resource diplomacy as an important component of his foreign policy, aiming to weaken the resource advantages of competitors by securing the supply of critical resources for the United States, to boost the competitiveness of domestic manufacturing and to support industrial reshoring. For example, a Section 232 investigation has been initiated into copper imports to assess their potential impact on national security. More trade protectionist measures are expected to follow.
• Imposing tariffs and trade quotas and other trade barriers aimed at undermining the export capacity and global market share of Chinese mining companies.
Two years from now, in October 2027, for example, the U.S. Department of Defense will ban the purchase of batteries from six Chinese companies, including CATL and BYD, a move that will directly affect the global business interests of these companies. In addition, the United States has raised the cost of China’s overseas cooperation through political intervention, such as forcing a renegotiation of a mining project in the DRC, thus rendering China’s access to critical minerals overseas more difficult and uncertain.
Under the pressure of the Trump administration's resource diplomacy, China needs to enhance its capabilities to ensure resource security and maintain industrial competitiveness. This means increasing domestic exploration and development, promoting the transformation and upgrading of resource industries and increasing the efficiency and added value of resource utilization. At the same time, it needs to expand resource cooperation with other countries, diversify supply sources and enhance its voice and influence in the global resource market.
