According to Reuters report on June 15th local time, the Trump administration's plan to boost the production of key minerals through price regulation is under scrutiny by G7 allies, and it has also caused divisions within the mining industry. According to information from diplomatic sources and analysis by Reuters regarding corporate policy recommendations, negotiations to form a Western mineral trade group have also stalled due to concerns about the costs and governance mechanisms of this plan.
This trade alliance concept was first proposed by the Vice President of the United States, Mike Pence, in February this year. The aim is to free the West from its dependence on China through this initiative. China is currently the world’s largest producer of minerals, and these minerals are essential raw materials for semiconductors, computer servers, military equipment, and many other products.
According to the plan, the trade group will study measures such as price support, market standards, subsidies, or guaranteed purchases, in order to encourage and provide financial support for mineral production in multiple countries. Vance stated that these measures could also be implemented through ‘adjustable tariffs to maintain the integrity of the price system’.
According to three sources, since Vance announced the plan, G7 member countries have expressed objections during private negotiations with US Trade Representative Robert Lighthizer. They are also skeptical about the idea of this trading group relying on pricing systems derived from US Department of Defense artificial intelligence models. Moreover, Europeans have many concerns regarding who will pay for these initiatives, where subsidies should be given, and how governance mechanisms should work.
Meanwhile, there is also disagreement among the American mining industry regarding the measures that Grier should push his allies to support. Reuters has reviewed over 230 public statements submitted by various mining companies, refiners, and their customers to the U.S. Trade Representative Office. These documents clearly reflect this disagreement.
June 15, 2026, during the G7 summit at the Evian Le Ban Royal Hotel in France, U.S. President Donald Trump attended the conference. IC Photo
According to Reuters, at present, many niche minerals that are crucial for technology and defense are traded outside the formal market mechanisms. There is very little transparency in these transactions, and prices are often linked to the Chinese market. Given China's dominance in production, its prices actually determine the global market conditions.
However, regarding the US's proposal, European officials pointed out that the main concerns of all parties are: who will pay a premium for these minerals? Which part of the supply chain should be covered by the subsidies? And how will the governance mechanism work?
American allies and businesses' various concerns highlight the complexity of reshaping the mining trade model. More than a dozen analysts and advisors told Reuters that how such a Western mining trading group will ultimately be formed and whether it will succeed could have an impact on the mining market in the coming years.
This week, the G7 summit is taking place in France, and this topic will also be a focus of discussion. Western countries face a formidable task: in order to diversify their supply chains and reduce dependence on China, they must establish a complete supply chain from mining to end products.
According to an American official, this draft U.S. proposal was developed using artificial intelligence pricing techniques developed by the Defense Advanced Research Projects Agency (DARPA), a department of the Pentagon. The proposal has been submitted to the White House and the National Security Council. It is expected that U.S. representatives will brief their allies on the proposal during the G7 summit.
European officials and industry representatives said that they hope to study the impact of price support measures on the market in the medium to long term, rather than rushing to reach an agreement. This is also a disagreement with the faster pace of action in the US.
According to the sources, at the same time, the Trump administration was reluctant to accept France’s proposal to establish a permanent administrative secretariat within the International Energy Agency (IEA) or the Organization for Economic Co-operation and Development (OECD), in order to continue monitoring initiatives related to critical minerals during the rotation of G7 rotating chairmanship.
According to three people familiar with the situation, what complicates matters is that Canada and France, as the G7 rotating chair country, want to establish a trade group led by the G7. Meanwhile, the United States aims to avoid multilateral negotiations and instead seek to reach specific bilateral agreements quickly, with a gradual expansion of cooperation on this basis.
The approach taken by Washington to pursue bilateral approaches seems to indicate a shift in its strategy, different from the plan first proposed by Vance earlier this year.
According to two people familiar with the matter, the United States plans to submit a proposal regarding the conclusion of binding bilateral agreements with Japan and the European Union by the end of June. This proposal would be the first concrete step taken by the United States, following the announcements of action plans by the United States with Japan and the European Union earlier this year.
It is reported that the first binding agreement may cover 5 to 10 minerals. The minerals considered include heavy rare earths, antimony, graphite, and tungsten, all of which are affected by Chinese export bans or restrictions.
A source said that European allies oppose using an artificial intelligence pricing system developed by the United States, citing concerns that the US could have too much influence over the group's pricing decisions.
Another source familiar with the matter added that Europe hopes to have a wide range of tools and “flexible governance mechanisms” in order to take the best measures against specific minerals and their value chains.
As a potential alternative to the US-based pricing model, the EU-funded organization EIT RawMaterials is working with the digital platform Metalshub to develop price indices that are independent of the Chinese-dominated pricing system. This will provide foreign investors with clearer signals regarding profitability. In the future, these indices may cover not only Europe but also the United States, Australia, Canada, and the UK.
However, the implementation of any trade group may face complex situations, as many Western countries import very small quantities of raw minerals or minimally processed mineral products. For example, the United States does not frequently import lithium carbonate, but it imports a large amount of mobile phone products made from lithium carbonate.
Consultants at Wood Mackenzie (WoodMac) stated by James Willoughby: “There is a great deal of confusion surrounding the information released by the US on battery metal.”
Previously, industry views suggested that American rare earth companies are still in the early stages of challenging China's dominance in the rare earth industry.
Atlantic Council's Scrofford Strategy and Security Center's 'Indo-Pacific Security Initiative' program intern, Alvin Camba, said: "The real bottleneck for the United States lies in the middle stage... that is, the processing and refining phases. There is a lack of competitiveness in terms of technology, labor capabilities, and prices."
He added that a key issue is whether the United States or its allies can establish sufficiently strong midstream capabilities to absorb the output from upstream.
After 30 years of support from national industrial policies, technologies for rare earth separation, chemical processes, engineering techniques, and a team of professionally trained personnel have now been highly concentrated in China. He believes that the only way to break this high concentration is to establish a complete supply chain that runs from upstream to downstream.
Some countries' production and reserves of rare earths account for a significant portion of the global total. Chart by The Wall Street Journal
In a statement to Reuters, US Trade Representative Gilbert said he is using letters submitted by mining companies and their customers "to guide and help shape policy directions for ongoing negotiations with US allies".
These opinions indicate that respondents generally believe that the trade group should focus on niche-critical minerals rather than broad-traded commodities like copper. Additionally, attention should be paid to downstream products such as mobile phones and laptops.
However, there is a clear disagreement among various parties regarding how to regulate mineral prices. Many well-known companies and mining industry organizations recommend avoiding the use of price-setting mechanisms.
EY Consulting company's Managing Director Blake Harden said, “All parties are concerned about how to proceed and the potential impact of different measures on various links in the supply chain.”
The organizations that have put forward different suggestions include the American automaker General Motors, Lithium Americas, which is working together with GM to build the largest lithium mine project in North America; the recycling company Umicore; the platinum group metal producer Sibanye Stillwater; the American Chamber of Commerce; and the rare earth company MP Materials.
Among them, MP Materials became the only company to receive support from the U.S. government’s financial stabilization mechanism last July. This means that when the price of rare earths drops below a certain level, Washington provides financial support to the companies. Meanwhile, Lynas Rare Earths and Serra Verde received agreements from the U.S. government to purchase a portion of their rare earth production at fixed prices, but they did not receive any financial stabilization arrangements.
The American industry trade group, the National Mining Association, advised Grier to avoid excessive interference with pricing and instead focus on tax credits and other incentives.
According to Rich Nolan, the chairman of the association, "While price mechanisms and other market intervention measures might have a role in specific situations, measures based on incentives...are more suitable for addressing the challenges faced by China's mining industry."
