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Trump effect? US firms spending billions to counter China dominance in critical industries
China has come to have a near-monopoly on the supply of critical minerals in the world. (Photo: Reuters)
Major US companies are ramping up investments to reduce dependence on China in critical sectors. On Monday, Ford announced a $2 billion overhaul of its Louisville Assembly Plant, transforming it into a hub for affordable, high-tech electric vehicles. The company is scrapping its century-old moving assembly line to build EVs faster, with fewer parts and lower costs, starting with a $30,000 mid-sized pickup truck set to debut in 2027. Ford's chief EV, digital, and design officer Doug Field said the redesign is not just about efficiency but a strategic move to compete head-on with China.
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In the strategic materials sector, the Pentagon has taken a 15 per cent stake in MP Materials through a $400 million investment, securing rare earth mining capabilities at the Mountain Pass mine in California — the only active rare earths mine in the United States. This will make the US government the mine's largest shareholder, part of a broader push to secure critical mineral supplies vital for technologies from EVs to wind turbines. China currently accounts for around 70 per cent of global rare earth mining and 90 per cent of processing, giving it significant leverage in global markets.
MP Materials has signed a 10-year deal with the US Department of Defense guaranteeing a minimum price of $110 per kg for neodymium and praseodymium — key rare earth elements used in permanent magnets for products such as smartphones, MRI scanners, and electric motors. The agreement also includes building a US-based processing facility to supply both defence and commercial markets.
Meanwhile, North Carolina-based startup Vulcan Elements has raised $65 million in Series A funding, valuing the company at $250 million, to ramp up rare-earth magnet production. These magnets are crucial for drones, electronics, and defence systems. CEO John Maslin said the firm has contracts with every branch of the US military and will begin deliveries this month.
Both moves reflect Washington's broader effort to onshore production of critical materials, reduce vulnerability to Chinese supply chains, and maintain a technological edge in the global race for next-generation industries.
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