America’s “Most Dangerous Dependence”: Can the U.S. Win the Critical Minerals Competition?

“For years, China has leveraged its dominance of critical minerals by manipulating global markets and supply chains,” Senator Todd Young (R-Ind.), a co-sponsor of the “strategic resilience” measure, told The Cipher Brief. “These materials are used in everything from fighter jets and submarines to missile systems and drones, and China’s monopolization has created a significant vulnerability.”

Experts agree: the competition for these minerals poses one of the most important strategic challenges of our time, and the U.S. faces a long and uphill struggle to counter China’s advantage. Critical minerals are often referred to as “the new oil”; one leading expert calls them “America’s most dangerous dependence.”

The push to reduce that dependence has been in the works for more than a decade, but only recently has the U.S. begun implementing an industrial and diplomatic strategy of its own, aimed at diversifying the supply chain and at least denting China’s near-monopoly on the supply and refining of these minerals.

“This is the culmination of looking at every single tool in the toolbox and the broader strategic issues,” Fabian Villalobos, Senior Engineer at RAND and Professor at the RAND Graduate School of Public Policy, told The Cipher Brief. “The U.S. is moving from analysis and into operations. There’s a point when you stop doing analysis and you start doing something about it.”

China’s Big Head Start

China’s path to dominance in the critical minerals space – like many aspects of its rise to global superpower – has been a long time coming. Since the 1990s, Beijing has tightly controlled the mining, processing, and export of critical minerals, backing its state-owned companies, restricting foreign investment, and consolidating production.

Today, China isn’t just a prolific miner of minerals; it dominates the ecosystem that brings them to market. The 2025 USGS Mineral Commodity Summary reads like a litany of China’s hold on the supply chain: The U.S. is completely dependent on imports for 12–13 minerals on its list of critical minerals; China is the leading supplier for 24 minerals for which the U.S. import reliance exceeds 50%; and for 19 of the 20 minerals that the U.S. rates as most strategically important, China refines at least 70% of the global supply – and more often well beyond 90%.

China’s chokehold wouldn’t matter much if U.S.-China relations were on a smooth path; they aren’t, of course, and last year the issue made headlines because China played its “minerals card” to great effect. Following President Trump’s imposition of tariffs against China in April, Beijing responded by tightening export controls on rare earths and magnets, and six months later it expanded the restrictions, targeting minerals essential for the U.S. defense sector. A Trump-Xi summit led to an easing of the restrictions, but the message had been sent: on a vital issue for U.S. economic and national security, China has the U.S. over a barrel.

Villalobos said that as important as China’s grip on the minerals supply chain is its industrial policy – a package of state financing, price manipulation, and export controls that aims for dominance in key high-tech sectors.

“Xi Jinping has directed components within China to create a world dependent on its industry,” Villalobos told The Cipher Brief. “And China wants to dominate the industry of the future – whether that’s electric vehicles, batteries, robots or high-tech weapons.” He cited the example of gallium, a mineral used in semiconductors for solar panels and LED screens. By imposing export restrictions on gallium, he said, Beijing has driven some foreign companies to house manufacturing in China. “What China does is incentivize technology into their country.”

Meanwhile, China has extended its supply advantage by striking deals with mineral-rich nations in Latin America and Africa. The result? A near-stranglehold over the global supply chain.

On the Home Front: “Project Vault” and a “Strategic Resilience Reserve”

Successive U.S. administrations have been working on the minerals issue for more than a decade. The Obama Administration’s Department of Energy issued a Critical Minerals Strategy in 2010; since 2020, the Pentagon has spent more than $439 million to establish a domestic rare earth element supply chain; and the Biden Administration established the 14-nation Minerals Security Partnership (MSP) in 2022.

The second Trump administration has “turned it up a notch,” as Villalobos said, with a flurry of measures on the domestic and global fronts.

On February 2, President Trump announced “Project Vault,” a $12 billion plan to build a U.S. stockpile of critical minerals, spur domestic production and insulate producers from future supply shocks. The project is backed by a $10 billion loan from the Export-Import Bank of the United States (by far the largest outlay in the bank’s history), along with $2 billion in private funding. The stockpile – which Trump likened to the U.S. Strategic Petroleum Reserve – would ensure a 60-day emergency supply for manufacturers. As President Trump put it, “We don’t want to ever go through what we went through a year ago”—that is, when China imposed the export controls.

Observers note that Trump is taking a China-style approach – leveraging the state’s economic and political power to secure supply. As laid out, Project Vault would employ many of Beijing’s tactics – state financing, partial government ownership of mining firms (most notably a multibillion-dollar public-private partnership with MP Materials), and strategic stockpiling to support domestic producers.

“The Trump administration has proven willing not only to convene these initiatives but to back them with significant taxpayer resources,” Michael Froman, president of the Council on Foreign Relations, wrote this month. “In the past six months, the administration has announced plans to deploy tens of billions of dollars in public capital—taking equity stakes in and extending credit to strategic firms—in an effort to reengineer entire global supply chains.”

Prior to the “Project Vault” announcement, Senator Young and three other members of Congress – a bipartisan group – introduced the SECURE Minerals Act, which would establish a $2.5 billion “Strategic Resilience Reserve” (SRR) for critical minerals, support domestic industry, create storage facilities to warehouse supplies of key materials, and “act as a market stabilizer against price manipulation.”

“To grow our independence and protect our national security,” Sen. Young told The Cipher Brief, “we need to ensure the United States has a secure and accessible supply of critical minerals.”

Mahnaz Khan, Vice President of Policy for Critical Supply Chains at Silverado Policy Accelerator, co-authored a recent Council on Foreign Relations report on countering China’s advantage. “What is emerging under the Trump Administration,” Khan told The Cipher Brief, “is a new American industrial playbook for critical minerals.” The overall approach, she said, “is about rebuilding and reshoring an entire rare earths sector to reduce decades of dependence on China.”

On the Global Stage: A Hunt for Allies

Experts and policymakers agree that the U.S. cannot replicate China’s 30-year head start in mining and refining – at least not anytime soon. With that in mind, the Trump Administration is turning to other parts of the world for help.

On February 4, Secretary of State Marco Rubio hosted leaders from more than 50 countries in a gathering “to reshape the global market for critical minerals and rare earths.” The meeting served as a launch for the Forum on Resource Geostrategic Engagement initiative (FORGE), which the U.S. pitched as a coalition of nations that would work as a counterweight to China. The State Department said FORGE would demonstrate “the benefits of working together…to strengthen diversified, resilient, and secure critical minerals supply chains.”

It was a striking show of multilateralism for an administration that has taken a hardline approach to many longstanding alliances.

One week later, the Trump administration sent the largest-ever U.S. delegation to Africa’s biggest mining conference – a nod to that continent’s rich supply of critical minerals, and another example of engagement in a part of the world the Trump Administration had neglected.

Meanwhile, the U.S. has pursued a slew of bilateral deals; as Axios put it, “President Trump is bringing his prospector’s pick to nearly every corner of the globe — including Ukraine, Venezuela and Greenland — in a push to boost the U.S. supply of minerals.”

On the day of the 54-nation minerals meeting, the State Department announced critical minerals frameworks or MOUs with Argentina, Morocco, the Philippines, the United Arab Emirates, Great Britain and a half dozen other countries. These followed larger-scale agreements: a multibillion-dollar deal with Australia that officials said could provide up to 40 of the 50 minerals the U.S. deems essential; a U.S.-Saudi Arabia agreement to develop a refinery in the kingdom; and a U.S.-Japan trade agreement that includes Japanese investment in a Georgia-based plant that produces synthetic diamond grit – a mineral used in advanced manufacturing and semiconductors. Last year the U.S. signed a minerals deal with Ukraine, and Trump has acknowledged that rare earths are a part of his interest in gaining control over mineral-rich Greenland.

“It’s got to come from somewhere,” Villalobos said of the wide-ranging push for more global supply. “The harder piece is where you put up non-Chinese refineries.”

When it comes to convincing other nations to sign on to an anti-China minerals coalition, the U.S. may face headwinds. Many U.S. allies have bristled at American tariffs and threats and ridicule from Trump and his top aides. As Politico noted, “Some will be skeptical about America’s new-found zeal for cooperation on this issue.”

“In the aftermath of a year of disruptive diplomacy, culminating most recently with the tension over Greenland with the rest of NATO, many have asked how willing other countries are to work with us,” Froman said. “Other countries have domestic politics, too, and based on many of their recent statements, our goodwill is diminishing.”

“Leapfrogging” China – and Other Out-of-the-Box Ideas

Some experts have argued that given the urgency of the issue and China’s huge head start, out-of-the-box thinking will be required.

A report published this month by the Council on Foreign Relations and Silverado Policy Accelerator argues that the U.S. should aim to “leapfrog” China’s dominance by “scaling disruptive innovation, recovery, and recycling” rather than striving to “out-mine, out-process, or out-fund China.”

“The United States will not secure its critical mineral future through traditional mining and processing alone,” the report said. “The most promising way to leapfrog China’s entrenched position is for the U.S. government to maximize breakthrough materials engineering, advanced extraction and processing technologies, waste recovery and recycling.”

In a similar vein, a study published in Science said that the U.S. could meet most of its critical mineral needs by recovering metals from existing mining waste. Researchers at the Colorado School of Mines analyzed waste from 54 active U.S. mines and concluded that “byproduct recovery” could supply sufficient amounts of copper, lithium, nickel, rare earths and other materials; for 15 minerals, including gallium and germanium, the report claimed that recovering less than 1% of waste could replace all imports; for another 11, including lithium, 1–10% recovery would suffice.

Villalobos is skeptical that “leapfrogging” China is possible anytime soon. While he supports greater investment and innovation in domestic mining, he said real impact would take years. On the recycling front, he and others noted that China has a head start there as well – given that EV battery producers have built-in recycling departments, and that it may be difficult to make American recycling and recovery economically viable. “It doesn’t mean we shouldn’t be doing these things,” he said, “but it’s just part of a long-term strategy.”

Then there’s the prospect of deep-sea mining – which is where the Cook Islands come in. Last year the U.S. announced bilateral cooperation with the 15-island nation, located between New Zealand and Hawaii, on seabed mineral exploration within the islands’ Exclusive Economic Zone. That’s a vast area that is rich in cobalt, nickel, titanium, and other critical minerals. The announcement followed an April Trump administration executive order – “Unleashing America’s Offshore Critical Minerals and Resources” – that would allow for deep-sea resource exploration in international waters. A RAND report found that “the emergence of a seabed mining industry would introduce a new source of supply for critical minerals,” but RAND and others have noted that deep-sea mining is highly controversial from an environmental standpoint, and that China has been aggressively pursuing deals with the Cook Islands and other Pacific island nations as well.

Further “out of the box,” some hi-tech leaders believe AI and quantum computing could be part of the solution, by helping to design synthetic substitutes and alloys. Speaking at this year’s World Economic Forum, SandboxAQ CEO Jack Hidary said these tools could compress decades of material development into a few years, thus bypassing China’s near-monopoly on refining.

Experts stress that in the critical minerals competition, it’s not a choice between domestic innovation and global diplomacy and out-of-the-box ideas; the U.S. should be trying all of these measures – and more.

“A long-term strategy must take an all-of-the-above approach,” Farwa Aamer, Director of South Asia Initiatives at the Asia Society, wrote in a recent report. “It must build capacity in the United States and among trusted partners, while also supporting research into alternatives and substitution technologies.”

A Long Road Ahead

President Trump has already claimed that victory in the minerals competition is on the horizon. “About a year from now, we’ll have so much critical mineral and rare earths that you won’t know what to do with them,” Trump said at a signing ceremony for the U.S.-Australia minerals agreement.

Experts have a different view – noting that new mines and refineries will take a decade or more to come online, some would-be allies may be reluctant to join the U.S. coalition, and the Trump administration’s recent funding pledges may face political challenges as well.

The domestic policy “is not without risk,” Froman said. “The U.S. government has announced more than $30 billion of direct funding commitments…related to critical minerals. In a number of cases, the government is taking direct equity stakes in private companies, pushing the envelope of industrial policy into the realm of state capitalism. The taxpayer stands to lose a great deal if these investments and loans go south.”

The Nikkei Asia Review surveyed experts after the “Project Vault” announcement and said that overall, the U.S. faces a “decade-long” road to loosening China’s grip on rare earths” – with refining representing the principal challenge.

Meanwhile, China isn’t standing still. Beyond the lever of export controls, Beijing has moved to build a global minerals alliance of its own, and it continues to challenge U.S. efforts on the world stage. Experts note China’s recent success in gaining control of a major Tanzanian rare-earth mine, which for years had been held by an Australian company and seen as a model for creating a China-free supply of rare-earth minerals. According to Benchmark Mineral Intelligence, Beijing now stands to receive all the rare earths flowing from Tanzania, one of the world’s major emerging sources of the elements, by 2029.

Can the U.S. still “win” the critical minerals competition? Experts say the answer is Yes, if winning means reducing vulnerability and building a coalition strong enough to blunt Chinese coercion. Put differently, success would mean that China cannot use its minerals advantage to shut down U.S. defense or tech production.

“Winning in critical minerals means reducing net import reliance by scaling mining and processing at home and with trusted partners,” Silverado’s Khan said, “so that China can no longer use these critical minerals as leverage in trade conflicts, securing U.S. economic and national security for the long term.”

Villalobos said the most important challenge is ensuring a price floor for minerals, one that lasts and exists for more than one company at a time (at the moment only the MP deal has such a provision). “If you can get a price floor that applies to the whole industry and that’s global in scale, that’s victory. After that it’s just a waiting game.”

But if winning is defined as replacing China as the world’s dominant minerals power, and doing so anytime soon, then it would appear the answer is “No.” And even in the best-case scenario, much will be needed for a “win”: a consistent stream of domestic investments – likely running north of $100 billion; effective cooperation with allies; far greater refining capacity; and innovation in domestic mining, recycling and possible alternatives to existing minerals. Again, an all-of-the-above approach – along with a measure of patience.

“Do I believe that the U.S. has a chance?” Villalobos said. “The answer is yes. The reality of the ‘yes’ is that it’s going to take a while.”

The Cipher Brief is committed to publishing a range of perspectives on national security issues submitted by deeply experienced national security professionals. Opinions expressed are those of the author and do not represent the views or opinions of The Cipher Brief.

Have a perspective to share based on your experience in the national security field? Send it to Editor@thecipherbrief.com for publication consideration.

Read more expert-driven national security insights, perspective and analysis in The Cipher Brief