Trump’s critical minerals plan faces G7 scepticism, industry split

Email: online@newsofbahrain.com

As leaders meet in France this week, the Trump administration's proposal to establish price supports for key minerals is  facing scepticism from G7 allies and divisions within the mining industry. The initiative seeks to reduce Western dependence on China, which controls global mineral supply such as lithium, cobalt, and nickel.

The concept, originally promoted by US Vice President JD Vance, envisions a Western trading bloc that might use price floors, subsidies, and adjustable tariffs to boost mineral extraction outside of China. Washington claims that China's low-cost dominance has deterred investment in Western mining and refining ventures.

However, other G7 members, including France and Canada, have expressed worry about how such a system would be managed, who would pay the expenses, and whether a Pentagon-developed AI model could impact pricing decisions. Before signing any agreement, European officials have urged greater transparency and more extensive evaluations.

The US mining industry is also split on the strategy. While certain companies favour subsidised price mechanisms to fight market instability, others prefer tax breaks and investment support over outright price controls. Industry organisations fear that excessive market involvement may distort trade and discourage private investment.

As Western countries look for alternatives to Chinese domination, the conclusion of the negotiations might have a huge impact on future global supply chains for crucial minerals, essential for semiconductors, electric vehicles, defence systems, and renewable energy technology.