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EU Moves to Partner With US on Critical Minerals
Proposal Pushes Joint Projects and Supply Chain Security to Reduce Reliance on Chinese Materials
Key Takeaways:
- The EU plans to propose a critical minerals partnership with the U.S. that includes a memorandum of understanding and a joint road map to curb reliance on China.
- The initiative matters because both sides depend heavily on cheap Chinese minerals, and officials aim to develop coordinated pricing mechanisms and supply chain protections.
- Negotiators expect to finalize an agreement within 30 days, with a draft statement set for release Feb. 4 outlining next steps and potential plurilateral trade efforts.
The European Union will pitch the U.S. on a critical minerals partnership to curb China’s influence, looking to shape the Trump administration’s push to strike global agreements this week.
The EU is prepared to sign a memorandum of understanding with the U.S. to develop a “Strategic Partnership Roadmap” within three months, according to people familiar with the matter.
The partnership aims to jointly find ways to source critical minerals, which are needed for most modern technologies, without relying on China. Both the U.S. and EU have become tethered to abundant, cheap Chinese minerals, giving Beijing leverage over their supply chains.
The proposal offers several ways to reduce this dependence, said the people, who spoke on the condition of anonymity to discuss private deliberations.
Both sides are aiming to conclude the negotiations within the next 30 days, according to a separate draft statement that the U.S. and the European Commission, the EU executive’s arm, are expected to release Feb. 4 and seen by Bloomberg News.
The memorandum suggests the EU and U.S. explore joint critical-mineral projects and price-support mechanisms. It also recommends ways to shield both markets from an oversupply of outside minerals and other forms of market manipulation. Meanwhile, the proposal says the two sides should build secure supply chains between each other.
RELATED: Administration to Create Strategic Reserve for Rare Earths
Notably, the EU proposal also insists both sides respect each other’s territorial integrity, the people added. The U.S.-EU relationship nearly ruptured in recent weeks after President Donald Trump signaled plans to buy Greenland, a territory of EU member Denmark.
The EU proposal comes as the U.S. is preparing to convene dozens of foreign ministers and senior officials from allied countries Feb. 4 to pursue agreements to cut reliance on Chinese critical minerals.
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Chinese President Xi Jinping and U.S. President Donald Trump during a bilateral meeting in Busan, South Korea, on Oct. 30. (Andrew Harnik/Getty Images)
According to a draft statement, the EU, the U.S. and other partners intend to explore a plurilateral trade initiative with like-minded nations on trade in critical minerals.
The White House did not immediately respond to a request for comment on the draft statement on Feb. 3.
“Such a plurilateral trade initiative could include exploring the development of coordinated trade policies and mechanisms, such as border-adjusted price floors, standards-based markets, price gap subsidies or offtake agreements,” the draft statement said. The draft statement could still change before its scheduled Feb. 4 release.
Numerous U.S. administrations have made similar pushes on critical minerals over the years, trying out several different strategies with little success.
The commission called the talks “vital to diversify our supplies away from any single country,” without commenting on the bloc’s proposal or the draft statement.
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The issue is a top priority for Washington after Beijing imposed export restrictions last year on so-called rare earths. The constraints were delayed in October as part of a deal between Trump and Chinese leader Xi Jinping, but American officials are now determined to make quick progress on the matter.
In particular, the U.S. is pushing countries to agree on a pricing mechanism to help insulate rare-earth mineral refiners and extractors from cheaper Chinese exports that could undercut supplies mined and refined in the west.
As part of this push, the U.S. pressed some EU member states to sign bilateral deals. In response, the commission asked the bloc’s countries to stick together, and EU capitals gave the commission a mandate to negotiate an agreement.
Officials have expressed skepticism, however, that a substantive deal could be finalized quickly enough.
Still, the EU’s offer shows the talks remain on track. And it reveals the two sides may find common ground.
For instance, the people said the EU’s memorandum notes the possibility of stockpiling critical minerals, which is also a Trump focus. The U.S. president on Feb. 2 launched a $12 billion critical-mineral stockpile to help protect manufacturers from sudden supply shortages.
The key pillars of the proposal the EU has drafted and is prepared to sign, according to the people, are:
- Cooperating to secure supply chains and cut dependencies, including by developing premium markets internationally and working together to withstand any disruptions;
- Deepening industrial and economic integration, including through joint projects;
- Exempting each other from export restrictions pertaining to critical raw minerals;
- Collaborating on research and innovation along the entire value chain;
- Exchanging information, including on supply chains and identifying risks, as well as working together to bring more transparency to the market. Measures to prevent disruptions could include stockpiling or the creation of a EU-US response group;
- Cooperation on export restrictions applied to third countries.
Written by Alberto Nardelli, Jenny Leonard and Jorge Valero
