The US is accelerating efforts to reshape global critical minerals trade policy, with a growing focus on price floors, coordinated trade mechanisms, and supply-chain security, following the conclusion of a broad Section 232 national security investigation and a high-level ministerial meeting in Washington this month.
The Commerce Department’s Section 232 investigation covered every mineral on the USGS critical minerals list, along with uranium.
The investigation found the indispensable role of minerals across the US economy, particularly for defense and critical infrastructure, and the price volatility that undermines investment in mining and processing projects in the US and other market economies.
That volatility was cited as a major barrier to developing alternative supply chains outside China.
The administration then announced it plans to launch a $12 billion critical minerals stockpile to reduce reliance on China and guard against supply chain disruptions as geopolitical tensions remain on the rise.
The White House confirmed the start of “Project Vault,” which would combine $1.67 billion in private capital with a $10 billion loan from the US Export-Import Bank to buy and store minerals for automakers, technology companies and other industrial users.
While the investigation concluded that mineral imports threaten US national security, the President opted not to impose tariffs or import restrictions. Instead, the administration directed the Office of the United States Trade Representative (USTR) and the Commerce Department to pursue negotiated solutions with allied countries, including the possible use of price floors and other trade-restrictive mechanisms.
One of the key findings was price volatility and the impact it has on the economic viability of new investments in the US and other market economies, Sahar Hafeez, senior counsel, international trade and national security matters and co-lead of Minerals, Metals, and Materials Supply Chains at Pillsbury Winthrop Shaw Pittman told MINING.COM in an interview.
The firm’s Washington DC office published a client alert shortly after the announcements, led by Hafeez.
“Commerce found that imports threatened national security — but instead of imposing tariffs, the President directed negotiations,” Hafeez said.
“The President directed USTR and Commerce to negotiate with other countries to address these national security threats and to consider price floors and other trade-restricting measures.”
Price floors and trade mechanisms
On the impacts of a border-adjusted price floor, Hafeez pointed out a big question: “What is it based on? What is the reference price?”
“Right now, many of these commodities — particularly where there is significant concentration in China — are priced off Chinese markets. So, what becomes the benchmark?”
“We don’t yet know how this would be implemented — whether it would apply to downstream products, or whether we could see changes to rules of origin in trade agreements,” she said.
The ministerial launched the Forum on Resource Geostrategic Engagement (FORGE), which is positioned as a successor to the Mineral Security Partnership.
Hafeez said one of the big themes was establishing price floors and potentially tying market access to those pricing mechanisms, adding that the US–Mexico action plan is the most concrete articulation of this policy so far.
What comes next?
Looking ahead, the most immediate developments to watch are the implementation of the US–Mexico action plan and the forthcoming U.S.-EU-Japan-related action plan, Hafeez said, adding both of which are expected to provide greater clarity on the path forward with potential price floors or other mechanisms.
Industry response, allied country participation, and potential reactions from China are also expected to shape the next phase of this rapidly evolving strategy.
“Implementation of the U.S.–Mexico action plan and the forthcoming U.S.-EU-Japan action plan are key — those will tell us what this actually may look like in practice,” Hafeez said.
“Which minerals are prioritized, how a price floor is calculated, and who signs on — those are the critical next steps,” she said.
“This is essentially about taking steps to redesign the market architecture for critical minerals.”
