In recent days, the agreement granting privileges for the extraction of critical minerals in Ukraine, signed between the United States and Ukraine, has become a focal point of political discourse. Critical minerals are indispensable for the production of green energy systems, semiconductors, batteries, and defense equipment. China remains the dominant force in this sector, controlling over half of global aluminum, lithium, and cobalt production, 90% of rare metals, and the entirety of natural graphite output. Additionally, Chile, Indonesia, Russia, the Democratic Republic of Congo, and Argentina play pivotal roles in the global critical minerals market.
Donald Trump’s advocacy for Ukraine to finalize a critical minerals agreement is a strategic maneuver aimed at providing a temporary assurance of American critical mineral security. In reality, it underscores the shortcomings of the Biden administration’s policy of technologically containing China.
In May 2023, in response to U.S. restrictions—implemented in collaboration with Europe—to curtail China’s technological advancements, China imposed export restrictions on gallium and germanium for states deemed unfriendly, citing national security concerns. These critical minerals are essential for semiconductor manufacturing, 5G base stations, and solar panels. The measure was a retaliatory response to the Netherlands’ decision to limit the export of technologies integral to high-end semiconductor production.
A year later, in August 2024, China expanded its restrictions to include antimony, a crucial material used in military applications such as infrared missile systems, nuclear weapons, and night vision devices. Given that China accounts for 48% of global antimony extraction, these restrictions posed significant challenges for the United States and its allies.
On December 2, 2024, the Biden administration prohibited the export of high-end chips and chip-making technologies to China. In retaliation, on December 3, China intensified its restrictions on gallium, germanium, and antimony exports to the U.S. Subsequently, on December 22, China imposed a ban on the export of technologies used in the production of rare-earth magnets, compounding earlier limitations on rare-earth extraction and processing technologies. Finally, in February 2025, China introduced controls on tungsten, tellurium, molybdenum, bismuth, and indium exports.
China’s countermeasures have exposed strategic vulnerabilities within the United States. It has become increasingly evident that U.S. dependence on China’s critical minerals and rare metals is as significant as China’s reliance on American high-end technology. First, reliance on these materials inflates the costs of military technology production and research in the U.S., granting China a competitive edge in the contemporary arms race. For instance, drones—now integral to modern military operations—require critical minerals and rare metals for battery production. A lag in battery technology diminishes the U.S.'s ability to compete with China in the development of remote-controlled military systems, as the efficacy of radar devices over strategic distances is contingent upon battery performance.
Second, in the domain of economic competition and corporate interests, China maintains a stronger position than the United States. For example, in the electric vehicle industry, BYD has emerged as a formidable competitor to Elon Musk’s Tesla, a key ally of Trump. By 2024, BYD commanded nearly a quarter of the global electric vehicle market—approximately 2.5 times Tesla’s market share. Electric vehicle batteries depend on critical minerals and rare metals, and China’s export restrictions on gallium and germanium significantly impact semiconductor production, thereby affecting the performance of artificial intelligence systems. Thus, while China relies on the U.S. for microelectronics, the U.S. remains equally vulnerable without China’s raw materials.
During Biden’s presidency, the United States sought to cultivate an independent critical minerals and rare metals industry. Between 2020 and 2022, the administration allocated $44.6 million to MP Materials for rare-earth metal separation and magnet production and $150.4 million to Lynas Rare Earths to enhance rare-earth extraction capabilities. Additionally, Washington implemented several initiatives:
Utilizing the Defense Production Act (DPA) to expedite the extraction and processing of lithium, nickel, cobalt, graphite, and manganese for EV batteries.
Allocating $3 billion across 14 states to boost battery production and mitigate reliance on foreign supply chains.
Approving domestic lithium extraction projects, including the Ioneer lithium project in Nevada, designed to supply lithium for 370,000 electric vehicles annually.
Strengthening strategic mineral reserves by stockpiling nickel and cobalt to reduce dependence on Chinese supply chains.
Increasing tariffs on Chinese imports, including doubling and tripling duties on solar panels and lithium-ion batteries.
Implementing the Infrastructure Investment and Jobs Act (IIJA), allocating $1 billion to rare-earth mineral stockpiling and $3 billion for recycling and recovery efforts.
Issuing an executive order on U.S. supply chains, conducting a 100-day review to identify vulnerabilities in critical mineral procurement.
Providing $16 million in grants to universities for research on extracting rare-earth elements from coal ash and mining waste.
Exploring financial incentives such as price guarantees for U.S.-based critical mineral extraction projects.
Despite the strategic significance of these measures, they have proven inadequate in fostering a competitive domestic critical minerals and rare metals industry. Unlike Biden, Donald Trump has embraced a more radical and tactical approach to the critical minerals sector, mirroring his stance on other policy domains. For example, his proposal to relocate Gaza’s population, though extreme, does not address the root causes of the Israel-Palestine conflict. Rather, it seeks to prevent the far-right faction led by Smotrich from abandoning Netanyahu’s coalition, thereby prolonging Netanyahu’s tenure. Similarly, Trump’s proposed critical minerals agreement with Ukraine and his aspirations to annex Greenland are radical and tactical yet unlikely to secure U.S. supremacy over China.
First, beyond mineral extraction, China maintains a substantial lead over the United States in the production of extraction-related machinery. Just as China must close the gap in lithography technology, the U.S. must bridge its deficit in critical minerals processing technologies. However, acquiring mineral reserves in Ukraine and Greenland does not resolve the technological challenges of production. For instance, while vast oceanic regions contain substantial mineral deposits, the U.S. lacks the requisite technological capabilities to rival China in deep-sea mining. Similarly, America’s limited technological capacity impedes its ability to efficiently exploit its domestic resources.
Second, public opposition to environmentally detrimental mining practices is considerably more pronounced in the U.S. than in China or other developing nations. The notion that green energy is entirely environmentally friendly is misleading; while fossil fuels contribute to atmospheric pollution, critical minerals predominantly cause localized environmental degradation around mining sites, shifting ecological crises from developed to developing regions. Heightened environmental awareness in developed nations may incite strong resistance to establishing a critical minerals and rare metals industry in the U.S. Furthermore, environmental activism in Greenland and Ukraine could obstruct American mining operations, diminishing the sector’s efficiency.
Finally, even if mining operations commence in Greenland and Ukraine, significant uncertainties persist regarding the feasibility of U.S. extraction endeavors. Key challenges include the scarcity of affordable, skilled labor, the risk of renewed Russian offensives in Ukraine, potential independence movements in Greenland, and competition with China’s well-established firms. Competing with these firms would necessitate substantial government subsidies, potentially straining the federal budget and contradicting free-market principles. Additionally, should Democrats regain control of Congress in the 2026 elections, Trump’s aggressive policies may be curtailed, further complicating long-term planning for the critical minerals sector. Consequently, the establishment of a robust, self-sufficient U.S. critical minerals and rare metals industry remains improbable.
Expectations Regarding U.S. Policy on Critical Minerals and Rare Metals
The United States may pursue the following policy directions to address challenges in its critical minerals and rare metals industry.
Aggressive Expansion
This characteristic, evident in President Donald Trump's foreign policy, may push the U.S. to take direct control of mineral reserves, either independently or through pro-American forces. Such direct involvement by the U.S. could endanger the existing world order and revive 19th-century colonial approaches in modern geopolitics. The American business elite's demand for minerals could influence political elites and, through propaganda, extend to the general public. This might lead to internal political polarization between liberal and democratic factions versus those advocating for colonialist perspectives.
On the other hand, expansionist policies could be implemented with the help of pro-American forces, resembling the oil wars of the 20th century. As a result, new centers of political and military conflict may emerge outside the Middle East, with Southeast Asia and Africa being potential hotspots.
Strengthening Ties with Russia
Russia, with its vast territory, struggles to fully utilize its resources due to technological limitations and economic sanctions. The U.S., however, has the capability to resolve both issues. By improving relations with Russia, Washington could alleviate its domestic mineral resource challenges. This approach would not only secure new supply routes for the U.S. minerals industry but also foster competition between Russia and China.
However, this strategy would maintain U.S. dependence on external suppliers, similar to how European nations relied on Russian energy resources in the early 19th century. While this measure may yield short-term benefits, its effectiveness could diminish once Moscow asserts its political ambitions.
Ending Trade Wars
To halt trade wars, Washington must address fundamental technological challenges. Since 1991, American technology companies have thrived under a unified global order, but after nearly a quarter-century, they are struggling to adapt to a multipolar world. While the U.S. once dictated global trade rules, today, individual nations are establishing their own regulations for technology markets and cyberspace.
In this new environment, innovation alone is not enough—American companies must also compete diplomatically and in terms of pricing. High labor costs and an active geopolitical stance have put the U.S. at a disadvantage, whereas China benefits from a more moderate foreign policy and cheaper labor. Lacking a competitive domestic environment and a favorable external strategy for its technology sector, the U.S. political elite has resorted to trade wars with foreign nations.
The counter-sanctions imposed in response to U.S. trade measures have not spared the mineral industry. Additionally, it has become evident that American tech companies, primarily those that grew after the Cold War, lack both the desire and the courage to compete internationally. Consequently, the government has been forced to support these companies through tariffs and sanctions.
To end trade wars—at least in the technology sector—Washington must implement effective domestic reforms. Otherwise, political polarization may intensify, and expansionist sentiments could gain further momentum.
Author: Shakhboz Juraev is the Chief Coordinator of Technology in Global Affairs. He is the author of the book "Hybrid Strategy of Cybersecurity: The Role of Information Technology Companies in Chinese Cybersecurity Policy”.