Trump strategy threatens critical mineral supplies for clean power
Summary
President Trump's sweeping tariff and policy shifts could undermine plans to expand U.S. production of critical minerals for clean power.
April 7 - U.S. solar, wind and battery developers depend heavily on imports of highly processed critical minerals from China, making them particularly sensitive to an escalating global tariff war under the Trump administration.
On April 4, China placed export restrictions on rare earth elements as part of a sweeping response to U.S. President Donald Trump's tariffs, squeezing supply to the West of minerals used to make a wide range of goods in energy, defense, and electronics.
President Trump has introduced a 20% tariff on all Chinese imports, retained the Biden administration's decision to increase tariffs on lithium batteries from China from 7.5% to 25% from January 2026 and slapped a 25% tariff on all steel and aluminium imports and all imports from Mexico and Canada. Meanwhile, U.S. antidumping and countervailing duties (AD/CVD) are set to be imposed on imports of Chinese active anode materials used in battery storage technology.
The U.S Geological Survey classifies 50 minerals as critical. Cobalt, lithium, manganese and nickel are used in energy storage systems and electric vehicles while copper is used in solar panels and electrical connections, silicon in PV panels, and graphite in lithium-ion batteries. Arsenic, gallium and tellurium are also used in solar cells.
China controls about 60% of global critical minerals' production and 85% of global processing capacity, with much of the remaining capacity located in countries with heavy Chinese investment, such as Democratic Republic of the Congo (DR Congo) and Indonesia.
CHART: Critical minerals - share of top three countries
Source: Federation of American Scientists. Data source: IEA. Purchase Licensing Rights, opens new tab
Consumption of minerals is rising rapidly and high level processing and refining of lithium, cobalt, graphite and rare earth elements are the key bottlenecks for the clean power industry, Tom Moerenhout, Research Scholar at the Center on Global Energy Policy at Columbia University, told Reuters Events.
Global demand for lithium is forecast to rise tenfold between 2022 and 2050 while demand for cobalt is predicted to triple, according to the International Energy Agency (IEA).
On March 20, Trump invoked the Defense Production Act to mobilise industry and expand domestic mineral output to reduce the country's reliance on China. This enables the federal government to finance new mining and requires federal agencies to speed up project approvals and prioritise mining on federal land.
The Trump administration is keen to build a domestic supply chain but it takes years to build such upstream activities and a combination of Trump tariffs and anti-climate energy policies could severely hamper plans.
Further U.S.-Chinese trade restrictions and tariffs 'could escalate faster than the U.S. is able to secure alternative supply chains, jeopardizing attempts to develop domestic clean energy manufacturing industries," Alice Wu, Senior Associate at the Federation of American Scientists, told Reuters Events.
The lack of a stable policy environment will 'have a chilling effect on future investments in the domestic critical minerals industry," she said.
China years ahead
The U.S. has little cobalt and no graphite mining or processing capacity, while its share of global processing capacity is just 3% for nickel and 1% for lithium. The average critical minerals' mine takes more than 16 years from discovery to first production, according to Deutsche Bank.
U.S. critical mineral suppliers have struggled to compete against low-cost facilities in China that benefit from state subsidies.
China's lead is the result of developing comprehensive supply chains over 20 years, so 'they have reached a level of standardization and technology development' that the U.S. lacks, Moerenhout said.
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Tariffs on Chinese imports can help higher cost domestic producers compete but raising them too quickly could make critical minerals too expensive for downstream industries, such as battery manufacturing, Wu noted.
The Biden administration sought to strengthen domestic supply chains by providing tax credits and funding for mining and processing facilities via the Inflation Reduction Act and Bipartisan Infrastructure Law (BIL).
If these support mechanisms remain in place, domestic lithium supplies could meet demand from domestic battery manufacturing plants by 2030, Argonne National Laboratory said last year, but there has been less progress with other critical minerals including cobalt, graphite and nickel.
MAP: US clean power manufacturing facilities operational or planned
Source: American Clean Power Association (ACP) report 'Snapshot of clean power in 2024' (March 2025). Purchase Licensing Rights, opens new tab
Other efforts by the Biden administration included the negotiation of bilateral agreements with allied countries, such as Australia and Argentina, and the provision of direct funding from the Department of Defense and U.S. Export-Import Bank to critical minerals projects abroad, Wu noted.
Growing U.S.-China tensions and Europe's reaction to Russia's invasion of Ukraine triggered new mining and processing projects, but 'those have yet to begin quantitatively shifting the global critical mineral supply picture', Seaver Wang, Director, Climate and Energy at The Breakthrough Institute, an environmental research center, told Reuters Events.
Barriers rise
The Trump administration is seeking to secure more critical mineral assets in DR Congo and has touted plans to expand its control of critical minerals in countries like Greenland and Ukraine. It also plans to streamline the regulatory process for new U.S. mines and processing sites, but its wider policies on energy threaten to hamper supply chain plans, Wang said.
Trump has frozen funding from the inflation act and BIL pending a review while aggressive reductions in federal workforces, such as the Forest Service, 'have dramatically reduced the ability of key agencies involved in mining to carry out their duties,' Wang noted.
Meanwhile, tariffs imposed on Chinese imports by the Trump administration in February 2025 led to Beijing imposing export controls on five critical minerals: bismuth, indium, molybdenum, tungsten and tellurium – the last of which is needed for cadmium telluride (CdTe) thin-film solar cells. It has also made it more difficult for engineers and equipment to leave the country.
Surging demand from tech groups is accelerating clean power activity - download our exclusive report.
An escalating tariff war with Canada is also a key risk for critical minerals supply.
Canada exported $29.8 billion in critical minerals to the U.S. in 2023 but these supplies are threatened by the imposition of tariffs on a wide range of Canadian goods by the Trump administration. British Columbia Premier David Eby has threatened to ban critical mineral exports to the U.S. in retaliation.
Picking fights with China, Canada and Mexico – the U.S.'s three biggest raw materials' suppliers – 'is not going to help supply chain resilience,' said Moerenhout.
To boost domestic supply chains, the U.S. government could provide project-specific grants and loans, support R&D in new mining and processing technologies and help with geologic mapping, alongside permitting reforms, Wang said.
But the U.S. cannot satisfy all its own needs and must build secure supply chains with overseas partners, he noted.
The U.S. government needs to recognise that some extraction and processing will be 'much more competitive' in key trade partner countries like Canada, Chile and Australia, Moerenhout said.
Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias. Reuters Events, a part of Reuters Professional, is owned by Thomson Reuters and operates independently of Reuters News.
Neil Ford
Neil provides news and analysis to a number of energy and African business publications. He also writes reports on Africa for the United Nations and the African Development Bank.
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