Trump considers tariffs on key mineral imports

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Trump considers tariffs on key mineral imports

President Trump has tasked the Commerce Department to study the possibility of tariffs on key minerals as part of a trade offensive against China, which dominates all key minerals.

In an executive order signed on Tuesday, Trump directed the department to investigate U.S. dependence on imports of critical minerals, arguing that over-reliance would have a negative impact on national security.

The order states: "Due to dependence on a small number of foreign suppliers, the processing of critical minerals and their derivatives is subject to significant global supply chain vulnerabilities and market distortions. These vulnerabilities and distortions have led to a heavy dependence on imports by the United States. The dependence on imports by the United States and the fragility of our supply chains increase potential risks to national security, defense readiness, price stability, and economic prosperity and resilience."

imposing tariffs on key mineral imports would be a rather risky move-precisely because of China's overwhelming global dominance in this area. In order to get rid of its dependence on Chinese imports, the United States needs to build its key mineral supply chain from almost scratch. In this process, it will face many obstacles, the most important of which comes from environmentalists who strongly oppose the mining of new mines.

However, in the long run, reducing dependence on imports will eventually pay off. Last week, China imposed export restrictions on certain key minerals, just as it did to Japan a few years ago during the trade dispute. In other words, it has long been common for China to use its dominant position in this field as a bargaining chip against its import-dependent trading partners. China's rare earth production accounts for 90% of global production. This has prompted Western countries to strive to diversify their rare earth supply chains, but the actual operation has proved to be far more difficult than empty talk.

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