U.S. President Donald Trump and Australian Prime Minister Anthony Albanese have struck a rare earths deal aimed at enhancing U.S. access to critical minerals. This agreement involves $1 billion in investments from both countries into mining and processing projects in Australia, which is vital for reducing U.S. reliance on China for resources essential to advanced technologies. The initiative is part of a broader U.S. strategy to counter China’s dominance over strategic minerals supply chains.
The White House has indicated that these investments will target critical mineral deposits valued at $53 billion, though specific details about the types or locations of these deposits remain undisclosed. The deal comes as tensions between the U.S. and China over rare-earth supplies continue to escalate. Earlier this year, China imposed export restrictions on critical minerals in response to U.S. trade policies, and the U.S. has threatened to impose additional tariffs on Chinese goods.
China accounts for nearly 70% of the global production of critical minerals, which are essential for advanced technologies, including electric vehicles, semiconductors, and weapons systems. The increased supply uncertainty has fueled U.S. efforts to establish alternative production capabilities. In response to Beijing’s imposition of export controls on rare earths, Trump threatened to impose an additional 100% tariff on Chinese goods starting in November, escalating tensions.
Commenting on the standoff with the U.S., Chinese Foreign Ministry spokesman Lin Jian reiterated last week that “tariff wars and trade wars have no winners” and urged for resolution through “consultation on the basis of equality, respect, and mutual benefit.” Earlier this year, Trump significantly raised “reciprocal tariffs” on China, with some exceeding 100%. However, he later suspended the increase to facilitate trade talks, extending the pause until November 10. The current baseline tariff for China stands at 10%, though certain goods face higher rates.