President Donald Trump of the United States announced on Wednesday that he has decided not to impose tariffs on lithium, rare earths, and other essential minerals for the time being.
Instead, he has instructed his team to look for supplies from other trading partners. The action postpones a judgment on duties that may further destabilize the American economy, particularly as the Supreme Court considers whether Trump's tariffs are lawful.
However, it may irritate the domestic mining industry by admitting that the nation is far from being self-sufficient for its essential mineral demands.
Commerce Secretary Howard Lutnick and U.S. Trade Representative Jamieson Greer were instructed by Trump to "enter into negotiations with trading partners to adjust the imports of (critical minerals) so that such imports will not threaten to impair the national security of the United States."
According to Trump, the talks should encourage the establishment of price floors for essential minerals, a move that Western miners and politicians have long desired.
For instance, earlier this week, G7 finance ministers convened in Washington with representatives from other large nations, such as Australia, to explore such a measure.
Trump stated he would think about establishing minimum import prices for essential minerals or "may take other measures," without providing specifics, if Greer and Lutnick's talks fail.
Under Section 232 of the Trade Expansion Act of 1962, Lutnick initiated a national security assessment last April and presented his conclusions to the president in October. In essence, Trump is accepting Lutnick's suggestion.
According to Lutnick's report, the United States lacks a secure supply chain, is "too dependent on foreign sources" for essential minerals, and faces "unsustainable price volatility" for these materials, all of which contribute to a "significant national security vulnerability that could be exploited by foreign actors." Why Trump did not act on Lutnick's report until this month was not immediately apparent.
For instance, China is the world's leading producer of almost half of the 54 minerals that the U.S. Geological Survey deems essential, and it has been reducing shipments over the past year due to its trade battle with Washington.
Additionally, the nation is a significant refiner of vital minerals. "Mining a mineral domestically does not safeguard the national security of the United States if the United States remains dependent on a foreign country for the processing of that mineral," Trump stated in his directive.
