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President Trump declares US critical mineral supply chain a national emergency

US President Donald Trump issued an Executive Order declaring a “national emergency” to deal with the threat to US security, foreign policy and economy from its “undue reliance” on supplies of critical minerals from “foreign adversaries”—specifically China.

Though these minerals are indispensable to our country, we presently lack the capacity to produce them in processed form in the quantities we need. American producers depend on foreign countries to supply and process them. For 31 of the 35 critical minerals, the United States imports more than half of its annual consumption. The United States has no domestic production for 14 of the critical minerals and is completely dependent on imports to supply its demand. Whereas the United States recognizes the continued importance of cooperation on supply chain issues with international partners and allies, in many cases, the aggressive economic practices of certain non-market foreign producers of critical minerals have destroyed vital mining and manufacturing jobs in the United States.

Our dependence on one country, the People’s Republic of China (China), for multiple critical minerals is particularly concerning. The United States now imports 80 percent of its rare earth elements directly from China, with portions of the remainder indirectly sourced from China through other countries. In the 1980s, the United States produced more of these elements than any other country in the world, but China used aggressive economic practices to strategically flood the global market for rare earth elements and displace its competitors. Since gaining this advantage, China has exploited its position in the rare earth elements market by coercing industries that rely on these elements to locate their facilities, intellectual property, and technology in China. For instance, multiple companies were forced to add factory capacity in China after it suspended exports of processed rare earth elements to Japan in 2010, threatening that country’s industrial and defense sectors and disrupting rare earth elements prices worldwide.

… The United States depends on foreign sources for 100 percent of its gallium, with China producing around 95 percent of the global supply. Gallium-based semiconductors are indispensable for cellphones, blue and violet light-emitting diodes (LEDs), diode lasers, and fifth-generation (5G) telecommunications. Like for gallium, the United States is 100 percent reliant on imports for graphite, which is used to make advanced batteries for cellphones, laptops, and hybrid and electric cars. China produces over 60 percent of the world’s graphite and almost all of the world’s production of high-purity graphite needed for rechargeable batteries.

… I therefore determine that our Nation’s undue reliance on critical minerals, in processed or unprocessed form, from foreign adversaries constitutes an unusual and extraordinary threat, which has its source in substantial part outside the United States, to the national security, foreign policy, and economy of the United States. I hereby declare a national emergency to deal with that threat.

—President Trump

To counter the threat, Trump ordered, among other actions:

  1. The Secretary of the Interior, in consultation with the Secretary of the Treasury, the Secretary of Defense, the Secretary of Commerce, and the heads of other agencies, as appropriate, to investigate US undue reliance on critical minerals, in processed or unprocessed form, from foreign adversaries. A report due in 60 days is to recommend executive action, which may include the imposition of tariffs or quotas, other import restrictions against China and other non-market foreign adversaries whose economic practices threaten to undermine the health, growth, and resiliency of the United States, or other appropriate action, consistent with applicable law.

  2. Starting in January, and every six months thereafter, the Secretary of the Interior, in consultation with the heads of other agencies, as appropriate, is to inform the President of the state of the threat posed by the reliance on critical minerals, in processed or unprocessed form, from foreign adversaries and recommend any additional actions necessary to address that threat.

  3. Relevant agencies should prioritize the expansion and protection of the domestic supply chain for minerals and the establishment of secure critical minerals supply chains so that the US develops is own capabilities and supply chains for critical minerals.

  4. Agencies to consider if the authority under a 2012 Executive Order could be used to establish a program to provide grants to procure or install production equipment for the production and processing of critical minerals in the United States.

Comments

SJC

The private sector won't refine rare earth, not profitable.

ai_vin

This is what he want's to declare a national emergency?
And he's waited until now to do it?

Paroway

You would think with so much dependence on China Trump would stop insulting them until the supply problem is solved.

Albert E Short

"Graphite" is a scarce mineral?

Nirmalkumar

Why has US slept all these yrs. China is enemy of the world . India knows these . All trade with china is manipulated for price quality etc so US has to start producing all 35 minerals as soon as possible.
How come china alone has these minerals.

Lad

@Nirmalkumar:
Good question; what has this administration done about the problem? Using an executive order this close to an election, instead of trying to negotiate fair trade agreements and/or increasing mining, is a play for votes.

SJC

china alone...
The U.S. has rare earth, we don't refine them, not profitable.
Capitalism says the only thing worth doing is the most profitable.

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