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Critical minerals were once again near the top of the agenda for G7 leaders as they met in Évian, France, this week, a year after the G7 launched the Critical Minerals Action Plan.
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Critical minerals were once again near the top of the agenda for G7 leaders as they met in Évian, France, this week, a year after the G7 launched the Critical Minerals Action Plan. The meeting was an opportunity for the United States to garner support for its plurilateral trade agreements, which would use trade mechanisms to support production outside of China. The final G7 declaration on minerals includes new initiatives but states only an intent “to continue to discuss the feasibility and development of policies and mechanisms that would be necessary to ensure supply chain resilience and diversification.” The lack of agreement on trade mechanisms reflects the disagreement among members of the supply chain over how best to balance the need for critical minerals diversification against the challenges of manufacturing competitiveness.
This disagreement is best seen in the comments filed to the United States Trade Representative (USTR) on the Design of a Plurilateral Agreement on Trade in Critical Minerals and Policy Actions to Strengthen the Resilience of Critical Mineral Supply Chains. Over 200 mining companies, battery producers, automakers, and industry and civil society groups provided public comment. They reveal broad agreement on the core challenges: China dominates the pricing of key critical minerals and policy should target the midstream, at the mineral processing or refining stage. Outside of mining companies seeking support for their own production, there is agreement that government action should focus on thinly traded, concentrated mineral markets—such as rare earths, germanium, gallium, antimony, and tungsten—rather than on deep, liquid markets.
But the comments also expose fissures, as mineral producers and original equipment manufacturers (OEMs) diverge on key questions of execution that continue to hamper momentum on critical minerals policy. Critical minerals diversification requires someone to pay the cost of a “resiliency premium,” but neither the private sector nor the government has decided who will bear the burden.
The proposed plurilateral trade agreement attempts to solve a central problem in critical minerals production, according to the United States and allies: firms in China are the lowest cost producers and companies outside of China are unable to compete on price, leading to severe market concentration. The goal of the trade agreement is to create a market that better aligns with the prices required to incentivize production outside of China. But this leads to a key disagreement between producers and refiners (the upstream) and OEMs (the downstream).
Companies across the supply chain advocate for an MP Materials style deal in which the government agrees to a contracts-for-difference scheme—funding the difference between the market price and a strike price. Under this approach, price certainty improves the producer’s access to private capital, while the cost bypasses the OEM. However, this deal is unlikely to be replicated beyond a few unique situations, as it would require significant public expenditure.
Instead, the plurilateral trade agreement would use tariffs and other trade mechanisms to raise prices with the trade bloc to a “reference” or “resiliency” price. Redwood Materials, a battery recycler and refiner, states that support is necessary because it would make “private investment in domestic and allied supply chains a rational investment proposition.”
One of the biggest challenges is how that price should be calculated. Several mining companies state the price should be based on the full cost of extraction and processing, which includes energy, transportation, and regulatory compliance, in addition to a commercial margin. USA Rare Earth recommends a reference price that allows for a minimum internal rate of return of 15% to attract private capital.
Regardless of how the cost is calculated, prices will rise and manufacturers worry additional costs will be passed to them. LG Energy Solution, a Korean battery maker with US facilities, warns of the impact of higher prices, stating in its comments to the proposal that higher input costs will be passed to manufacturers and throughout the value chain. It gave the example of the price-sensitive electric vehicle market, in which costs may not be fully passed to consumers. In this case, battery manufacturers may absorb much of the cost.
But mining companies say OEMs want lower Chinese prices that domestic producers cannot match. OEMs, for their part, compete globally and fear any increase in input costs will erode their market position. The tension can be eased through government support like MP Materials’ contracts-for-difference scheme or longer-term tax incentives, but only by shifting the burden onto the taxpayer.
Expanding domestic battery production has been a central tenet of US industrial policy since the Inflation Reduction Act (IRA). Yet Panasonic, with battery cell facilities in Nevada and Kansas, warns new trade mechanisms could undercut the very production that previous and ongoing industrial policies are meant to encourage. In its comments on the proposal, the company said tariffs on battery inputs such as copper, steel, and other critical minerals could make batteries manufactured in the United States more expensive than imports.
SK On, a Korean battery maker also producing in the US, commented that battery and other domestic manufacturers need assistance to offset any additional costs of mineral inputs to compete with imports. Several comments from other companies accordingly recommended price support, capital support, or tax benefits.
This amounts to layering new industrial policy atop the old—protecting investments that earlier industrial policy induced. One policy mechanism that has been mentioned by mining companies and manufacturers alike—incentives for domestic or allied mineral sources—was included in the IRA through the 30D tax credit but eliminated in the One Big Beautiful Bill Act. But measures involving taxation would require legislation from Congress and would also need to be replicated by allies such as Germany, Japan, and South Korea to help build a larger bifurcated market.
These fault lines are amplified among the G7, as each government carries its own industry’s position into the room. The same producer-versus-manufacturer divide that runs through the comments will run between allied capitals. These disagreements sit against the backdrop of rising prices due to the war in the Middle East, European trade tensions with China, and the fact that China is a crucial supplier of key minerals and technologies to industries in G7 countries.
The G7 could start supporting the diversification of critical minerals supplies with what has been missing from such policy so far: prioritization. Governments could focus on thinly traded, concentrated markets facing export restrictions. Any intervention would most likely need to be coupled with low-cost financing and potential offtake support. Beginning there and widening the scope through a published roadmap for future minerals, rather than trying to come to agreement on an upfront grand bargain, would not resolve who ultimately bears the resiliency premium but would get the ball rolling where consensus exists.
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This paper proposes a de-risking framework of policy interventions to provide the risk allocation, revenue certainty and delivery confidence required by mainstream private finance.
This paper examines the trade dimensions of the policy instruments employed by the United States to secure critical minerals supply chains. Drawing on policy statements, executive orders, tariff schedules, and six bilateral critical minerals agreements announced in 2025, it assesses how US trade policy has been repurposed to advance supply-chain security objectives. The paper finds that recent US initiatives reflect bipartisan trends in reconfiguring trade policy that predate the Trump administration, even as they introduce new and consequential trade coordination mechanisms that operate outside the World Trade Organization and beyond conventional free trade agreements. Specifically, US critical minerals security strategy now relies on a differentiated set of sector-specific arrangements that combine familiar elements of US international economic engagement with more novel features that increasingly utilize trade policy instruments. What distinguishes these six minerals deals is their systematic coupling with parallel reciprocal trade negotiations, their incorporation of an explicitly ‘America First’ approach to reciprocity, the absence of a clear ideological hierarchy among partner countries, an emphasis on domestic processing and industrialization, and the growing use of exclusion mechanisms targeting third-party actors. The recurrence of these novel elements across diverse minerals deals suggests deliberate design rather than ad hoc experimentation that may have durable restructuring effects across global mineral supply chains. The paper concludes by outlining implications for US policy makers, for partner countries—particularly mineral-producing low- and middle-income economies—and for the architecture of the global trading system.
