Trump’s Second-Term Reshaping of U.S. Critical Minerals Policy: Motivations, Progress, and Impacts by CAI Cuihong and YIN Jiahui
Critical minerals have become a key hinge connecting industrial policy, energy strategy, national security, and great-power competition.
Welcome to the 79th edition of our weekly newsletter! I’m SUN Chenghao, a fellow with the Center for International Security and Strategy (CISS) at Tsinghua University, Council Member of The Chinese Association of American Studies and a visiting scholar at the Paul Tsai China Center of Yale Law School (fall 2024).
ChinAffairsplus is a newsletter that shares articles by Chinese academics on topics such as China’s foreign policy, China-U.S. relations, China-Europe relations, and more. This newsletter was co-founded by my research assistant, ZHANG Xueyu, and me.
Through carefully selected Chinese academic articles, we aim to provide you with key insights into the issues that China’s academic and strategic communities are focused on. We will highlight why each article matters and the most important takeaways. Questions and feedback can be addressed to sch0625@gmail.com
Today, we have selected an article written by Cai Cuihong and Yin Jiahui, which focuses on the Trump administration’s second-term reshaping of U.S. critical minerals policy.
Summary
The reconfiguration of critical mineral supply chains has become an important lever for both U.S. parties to revive manufacturing, safeguard national security, and intensify strategic competition with China. At present, the critical minerals issue is deeply intertwined with policy domains such as the environment, security, and diplomacy.
There are major differences between the policies of the Biden and Trump administrations on critical minerals. In its second term, the Trump administration has made the construction of “energy dominance” a core objective, loosening regulation, expanding domestic development, strengthening bilateral cooperation and reshaping multilateral mechanisms to reconfigure the U.S. critical mineral supply system.
This will intensify turbulence in global critical mineral supply chains, encourage the formation of resource blocs, and sharpen competition over technology and standards. However, due to the United States’ weak industrial foundation, high development costs and substantial obstacles to international cooperation, the results of Trump’s critical minerals policy will remain limited.
Why It Matters
Critical minerals are the “strategic grain” of modern technology, clean energy, and the defense industry. As demand grows across countries, critical minerals have become an important front in great-power strategic competition. At present, U.S. critical minerals policy is gradually shifting from a market-first approach to a security-first one and ensuring supply chain resilience while prevailing in competition with China has become a major policy objective.
China is both a major producer and consumer of critical minerals, and U.S. exclusionary supply-chain policies may reshape the global mineral resource landscape and threaten the development of China’s high-end manufacturing and new quality productive forces. Therefore, analyzing the Trump administration’s second-term critical minerals policy not only helps to grasp the logic of America’s new round of industrial policies and strategies, but also helps China better coordinate resource security, industrial security and external cooperation so that it can retain the initiative in an increasingly competitive global critical minerals landscape.
Key Points
1. Drivers of Trump’s Second-Term Reconfiguration of U.S. Critical Minerals Policy
A change in the policy agenda. During the Biden administration, U.S. critical minerals policy was deeply tied to the green transition. Critical minerals were treated as a subtopic of clean energy and climate governance, mainly involving lithium batteries and new energy supply chains. Related legislation included the Inflation Reduction Act, the CHIPS and Science Act, and the Infrastructure Investment and Jobs Act.
Trump argued that Biden’s critical minerals policy raised energy prices and expanded fiscal spending. In addition, environmental review weakened the United States’ capacity for mineral development . As a result, early in his second term, Trump quickly overturned many of the Biden-era energy-transition measures and treated critical minerals as important resources for safeguarding America’s “energy dominance” and supply-chain security. In doing so, the Trump administration has bound fossil energy, geopolitical competition, and critical minerals together.
The two administrations differ clearly in their policy goals. The Biden administration treated critical minerals mainly as a supply-chain security issue and pursued “de-risking” in order to reduce dependence on China. The Trump administration has gone further by treating critical minerals as a tool of great-power geopolitical competition and emphasizing that the United States should achieve “dominance” in this field. This means that Trump seeks not only to reduce dependence on China but also to compress China’s room for influence in global resource politics.
In terms of cooperation pathways, Biden placed greater emphasis on bilateral and multilateral cooperation with allies and partner countries, hoping to build cooperative networks through mechanisms such as the Minerals Security Partnership and the Indo-Pacific Economic Framework. By contrast, the Trump administration prefers bilateral arrangements with a stronger transactional character. It tends to use tools such as market access, financing support, investment screening, tariffs, and even aid to push partner countries to make clearer policy commitments.
2. Progress in Trump’s Second-Term Reconfiguration of U.S. Critical Minerals Policy
Guided by “America First,” the Trump administration has sought to enhance domestic mining and processing capacity for critical minerals. At the very start of Trump’s second term, he declared a national energy emergency and elevated critical minerals to a new strategic level, placing them alongside fossil energy. The administration then created the National Energy Dominance Council and issued executive orders such as “Immediate Measures to Increase American Mineral Production,” simplifying approval procedures, expanding financing, removing environmental constraints, and promoting offshore mineral development. At the same time, the United States has shifted its policy focus toward a wider range of minerals such as copper and uranium, rather than remaining confined to the lithium-battery sector as it did under the Biden administration.
Bilateral cooperation has become more transactional, while multilateral cooperation has become more securitized. At the bilateral level, the Trump administration has consolidated cooperation with traditional partners such as Australia, Japan and Saudi Arabia. At the same time, it has brought Pakistan, Malaysia, Thailand and Central Asian countries into its critical minerals cooperation network, offering investment support and coordinating regulatory policies, supply guarantees, and pricing mechanisms.
The Trump administration has worked with these countries mainly through tools such as aid, sanctions, and reconstruction funds. At the multilateral level, it has deliberately weakened the Biden-era narrative of a “green supply chain” and instead used platforms such as the G7 and the Quad to advance its critical minerals agenda. As a result, the U.S. critical minerals agenda has become closely bound up with economic security, national defense security, and geopolitical confrontation.
3. Impacts of Trump’s Second-Term Reconfiguration of U.S. Critical Minerals Policy
Volatility in global critical mineral supply chains will intensify. Choosing “energy dominance” as its governing objective, the Trump administration is trying to expand capacity, restrict imports and restructure external cooperation within a short period of time. These measures have significantly increased market uncertainty and pushed up prices for copper, zinc, rare earths and other critical minerals. Once upstream prices fluctuate, the effects are quickly transmitted downstream, raising costs in industries such as electric vehicles, wind power equipment, and magnet manufacturing, while also increasing firms’ investment risks.
More importantly, the Trump administration is attempting to rewrite the original market-based global division of labor through executive orders and bilateral agreements, which could shift critical mineral trade from gradual adjustment to rupture-style restructuring. For many critical minerals, both China and the United States rely heavily on external supply, and their sources overlap to a high degree. If the United States pushes critical mineral supply chains in an exclusionary direction, it will further raise the geopolitical premium and push more countries into new economic security dilemmas.
Global resource governance and competition over technical standards will become more politicized. As the United States has shifted critical minerals from an economic issue to a strategic competition issue, the political coloring of global resource governance has deepened further, and the tendency toward smaller, more exclusive supply-chain circles has become more obvious. Through bilateral agreements and mechanisms such as the G7 and the Quad, the Trump administration has directly tied critical mineral supply-chain security to economic security and defense security. As a result, global resource governance is shifting from the logic of open markets to a bloc-based logic rooted in alliance cooperation.
At the same time, the Trump administration is seeking to keep technology-intensive segments such as processing, refining, testing, and certification within the United States and its partner system. It has actively supported R&D subsidies, fund investment, and the export of technical standards to reshape the global standards system and intensify competition in fields such as high-end smelting, materials applications, and rulemaking. These measures will also place greater pressure on China in industrial chains, technology chains, and international discursive influence.
4. Challenges to Trump’s Second-Term Reconfiguration of U.S. Critical Minerals Policy
The United States still has a weak industrial base. Long-term deindustrialization, the decline of mining, and inadequate supporting infrastructure remain persistent problems. Even if the United States emphasizes “rapid output expansion,” it will be difficult in the short term to make up for weaknesses in mine development, power transmission networks, rare earth separation, and high-end smelting. Moreover, many critical mineral projects take a long time to move from discovery to production, and the United States does not hold a clear advantage in reserves, extraction capacity, or processing capacity for some key minerals.
Developing critical minerals in the United States is costly and faces strong political resistance. Federal and state environmental regulations, environmental impact assessment procedures, and opposition from local communities and indigenous groups all slow project progress and increase financing uncertainty. Even if Trump relaxes regulations, it will be difficult to eliminate these obstacles in a short period of time.
The United States also faces considerable resistance in advancing critical minerals cooperation abroad. In some key processing technologies, the United States struggles to replicate capacity at scale, and partner countries may not be willing to accept exclusionary policy arrangements, let alone abandon their existing diversified cooperation networks or bear the risks created by frequent shifts in U.S. policy. Therefore, the actual effects of the Trump administration’s critical minerals policy are likely to fall short of its initial expectations.
Conclusion
In Trump’s second term, critical minerals have become a key hinge connecting industrial policy, energy strategy, national security, and great-power competition. By recasting the sector around “energy dominance,” Washington is seeking not merely to secure supply chains, but to reshape the global division of labor in mining, processing, and downstream manufacturing in ways that strengthen U.S. strategic leverage.
Yet, the harder the United States pushes to securitize and weaponize critical minerals, the more it risks destabilizing the market mechanisms that have long underpinned global resource allocation. Volatility, bloc formation, and standards rivalry may all intensify, but that does not guarantee U.S. success. Domestic bottlenecks, cost disadvantages, and partner resistance will continue to constrain implementation.
For China, the challenge is therefore long-term and structural rather than momentary. The key task is to strengthen whole-chain resilience at home while defending an open, stable, and non-exclusionary international resource order abroad. Strategic patience, technological upgrading, diversified cooperation, and proactive rule-shaping will be essential in navigating the next phase of global critical minerals competition.
About the Author
Cai Cuihong is Professor at the Center for American Studies, Fudan University, and a researcher at the Global AI Innovation Governance Center. Her research focuses on China-U.S. relations, information security strategy, cyberspace governance, and cyber politics in international relations.
Co-author Yin Jiahui is a PhD candidate at the School of International Relations and Public Affairs, Fudan University. Together, they work on U.S. strategy, industrial policy and China-U.S. strategic competition.
About the Publication
The Chinese version of this article was published in The Chinese Journal of American Studies (Meiguo Yanjiu, 《美国研究》), which was founded in 1987 and is jointly sponsored by the Institute of American Studies at the Chinese Academy of Social Sciences and the Chinese Association for American Studies. Originally launched as a quarterly and published as a bimonthly since 2014, the journal features Chinese scholarship on the United States, including its politics, economy, foreign policy, military affairs, science and technology, and culture.
