President Donald Trump on Tuesday directed Commerce Secretary Howard Lutnick to begin a national security probe of tariffs on critical U.S. imports, including rare earths and other vital substances.
“Critical minerals, including rare earth elements, in the form of processed minerals are essential raw materials and critical production inputs required for economic and national security,” Trump said in his executive order Tuesday.
Trump noted the “significant global supply chain vulnerabilities and market distortions” created by relying on “a small number of foreign suppliers” for these minerals.
“The dependence of the United States on imports and the vulnerability of our supply chains raises the potential for risks to national security, defense readiness, price stability, and economic prosperity and resilience,” the executive order said.
In fact, the United States produces only a negligible amount of its own minerals, despite having untapped resources in the ground.
The U.S. produces some lithium, which became the hottest of mineral products with the huge government-enforced push toward electric vehicles (EVs), but there is no domestic refining industry to speak of for metals such as nickel, cobalt, and even copper. There are copper mines in the U.S., but only two smelters to handle the ore, so foreign companies handle most copper smelting.
“Should the United States lose access to processed critical minerals from foreign sources, the United States commercial and defense manufacturing base for derivative products could face significant shortages and an inability to meet demand,” the president warned.
Trump accused foreign mineral suppliers of engaging in “widespread price manipulation, overcapacity, arbitrary export restrictions, and the exploitation of their supply chain dominance to distort world markets and thereby gain geopolitical and economic leverage.”
China, in particular, has been accused by both American and European companies of dumping vast quantities of minerals into their markets at cut-rate prices, making it all but impossible for local mining or refining industries to flourish.
The Biden administration complained last October about product dumping and “predatory pricing” from China’s lithium industry. China’s tactics cratered the price of lithium at a time when demand was slipping because EVs have not been selling well in the United States. This wrecked plans by American and European companies to develop their own lithium resources.
China did the same thing with cobalt in May 2024, flooding world markets with cheap cobalt squeezed out of mines in the Democratic Republic of Congo (DRC). China was willing to take a short-term loss through oversupply and predatory pricing to destroy foreign competition and maintain its stranglehold on vital minerals.
The Chinese believe such tactics demonstrate the ruthless superiority of its authoritarian system, which can manipulate prices to make competition from free countries unprofitable. Given the time it takes to develop mines and build refineries, a short burst of predatory pricing from China can kneecap industries in the free world for years.
Trump’s executive order directed the Commerce Department to investigate predatory pricing in the supply of rare earths and critical minerals, and produce a draft report within 90 days on the feasibility of using tariffs to control artificial price fluctuations and “incentivize domestic production.” A final report will be due 90 days after that.
Although Trump’s executive order did not name any specific country, it seems clear that China will be the prime suspect in the investigation of mineral dumping and predatory pricing. Trump ordered similar investigations of pharmaceutical and semiconductor imports this week.
