As the geopolitical landscape surrounding critical minerals continues to shift, China is recalibrating its strategy to address both domestic vulnerabilities and international pressures. The country currently dominates the refining of critical minerals, which are essential for various technologies, including renewable energy and defense systems. However, it faces significant supply vulnerabilities, prompting a national strategy that seeks to balance industrial policy with international cooperation [6a4e595f].
China is the world's largest importer of critical minerals, followed closely by the U.S., India, and Germany. This heavy reliance on imports has raised alarms, especially as major economies, including the EU and the U.S., are developing strategies to secure their own critical mineral supplies [6a4e595f]. The recent export controls imposed by China on germanium and gallium are seen as direct responses to U.S. restrictions, further complicating the global supply chain dynamics [6a4e595f].
In the U.S., the Biden administration has implemented a 10% tax cut for critical mineral production as part of its Advanced Manufacturing Production Credit (45X), aiming to bolster domestic production capabilities and reduce reliance on foreign sources, particularly China [7d2eb5ec]. This initiative is politically timed ahead of the upcoming presidential election, with over $75 billion already invested in U.S. clean energy since the Inflation Reduction Act [7d2eb5ec].
The contrasting approaches of U.S. leaders, such as Vice President Kamala Harris advocating for targeted tariffs and former President Donald Trump proposing broad tariffs on Chinese imports, reflect differing economic visions and underscore the urgency of securing critical minerals for the clean energy transition [41f7226f].
China's strategies regarding critical minerals date back to the 1970s, and its current focus on securing supply chains is crucial as it anticipates potential shortages and supply challenges in the future [6a4e595f]. The need for cooperation among nations is increasingly recognized as essential for reforming supply chains and minimizing disruptions in the global market [6a4e595f].
As the U.S. navigates its energy and economic policies, the outcome of the upcoming election could significantly influence the future landscape of critical mineral production and trade. Meanwhile, China’s evolving strategy highlights the complexities of international cooperation and competition in the critical minerals sector, emphasizing the need for a balanced narrative to address these challenges effectively [6a4e595f].