Trump launches probe into critical minerals as global trade war escalates
US President Donald Trump has signed an executive order to initiate an investigation into critical minerals, potentially leading to additional tariffs on industrial resources. The move follows recent probes into chip and pharmaceutical imports, signalling a further broadening of the global trade war.
The investigation, under Section 232 of the Trade Expansion Act of 1962, aims to 'determine the effects on national security of imports of processed critical minerals and their derivative products,' according to the official document. '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.' The same law was previously used by Trump to impose 25% tariffs on steel and aluminium, as well as to launch a probe into copper imports.
Last month, the president signed an executive order to boost domestic production of critical minerals by invoking the Defence Production Act, providing support such as financing and loans to the sector. The measure is widely seen as targeting China, which dominates the global supply chain.
According to the White House, the US relies on imports of 15 critical minerals, 70% of which originate from China. Last Friday, Beijing announced export restrictions on a wide range of critical minerals, such as germanium, gallium, antimony, and magnets, in response to Trump's sharp tariff hikes.
The US has only one rare earth mine and no domestic smelters, leaving it heavily reliant on China for natural resources, including rare earths and critical minerals—vital components in electric devices, battery-powered vehicles, aircraft, and defence equipment. A TD Economics report reveals that China dominates the global production of more than half of the 50 critical minerals identified by the US government in 2022. It also maintains a near-monopoly in refining, processing 90% of global rare earth elements. To strengthen its hand in the trade war, the US will need to diversify sourcing of these industrial materials.
'Processed critical minerals and their derivative products face significant global supply chain vulnerabilities and market distortions due to reliance on a small number of foreign suppliers,' Tuesday's investigation document states, 'The dependence of the United States on imports and the vulnerability of our supply chains raises the potential for risks to national security, defence readiness, price stability, and economic prosperity and resilience.'
In February, Trump demanded $500 billion (€442 billion) worth of Ukraine's rare earth and critical minerals as part of peace talks, a move also seen as a strategic effort to enhance the US's position against China.
Australia's major mining stocks fell during Wednesday's Asian session, with shares of BHP falling 1.2%, Rio Tinto sliding 2.3%, and Phibara Minerals dropping 2.9% as of 5:52 am CEST. In commodities, iron ore (CFR China) futures on the SGX declined 0.35%, while copper futures fell 0.91%.
The downturn in the resource sector may also be linked to reports that Nvidia is facing new US export restrictions to China, which could cost the tech giant billions of dollars. These fresh regulations are expected to dampen demand for industrial resources such as copper and certain critical minerals used in chip manufacturing. Combined with Trump's latest probe, the news has contributed to broader market weakness.
European markets may soon feel the ripple effects of the intensifying global trade war, with stock futures pointing to a lower open across major indices.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
9 minutes ago
- Yahoo
Asian shares climb, dollar eases ahead of US-China talks
By Rocky Swift TOKYO (Reuters) - Shares jumped and the dollar pared recent gains on Monday as Asian markets reacted to better-than-expected U.S. jobs data ahead of talks in London aimed at mending a trade rift between the United States and China. Wall Street stocks had closed sharply higher on Friday after the jobs data eased concerns about damage to the world's biggest economy from President Donald Trump's unpredictable tariff regime. Safe-haven assets such as gold remained lower after steep selloffs. MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.5% in early trade on Monday. Hong Kong's Hang Seng Index surged 1.3%, touching the 24,000-point level for the first time since March 21. Japan's Nikkei stock index rose 0.9%. At the same time, a standoff in Los Angeles that led to Trump calling in the California National Guard to quell demonstrations over his immigration policies weighed on sentiment. The dollar slid 0.3% against the yen to 144.39, trimming its 0.9% jump on Friday. The European single currency was up 0.2% on the day at $1.1422. Top trade representatives from Washington and Beijing are due to meet for talks expected to focus on critical minerals, whose production is dominated by China. The discussions follow a rare call last week between Trump and Chinese President Xi Jinping. "Trade policy will remain the big macro uncertainty," said Kyle Rodda, a senior financial market analyst at "Signs of further momentum in talks could give the markets fresh boost to kick-off the week." U.S. Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick and Trade Representative Jamieson Greer will represent Washington in talks with China, Trump said in a social media post. China's foreign ministry said Vice Premier He Lifeng will be in Britain for the first meeting of the China-U.S. economic and trade consultation mechanism. U.S. employers added 139,000 jobs in May, data showed on Friday, fewer than the 147,000 jobs added in April, but exceeding the 130,000 gain forecast in a Reuters poll of economists. Attention now turns to inflation data on Wednesday that will feed into expectations for the timing of any rate cuts by the Federal Reserve. Markets are facing "mixed fortunes" on Monday as they balance optimism over trade and the U.S. economy against the potential for social unrest in California, said Jeff Ng, Head of Asia Macro Strategy at SMBC. "The trade talks, if there's any progress, may help as well, but markets may not have priced in a lot of breakthrough for that," Ng said. "In the meantime, we are also quite cognizant that in the U.S. there are protests in L.A. and the National Guard is also being sent in, so we have to be on the watch for event risk as well." Spot gold fell 0.2% to $3,303.19 an ounce. U.S. crude was little changed at $64.56 a barrel after a two-day gain.
Yahoo
15 minutes ago
- Yahoo
China's factory-gate deflation worst in 22 months as economic headwinds mount
BEIJING (Reuters) -China's producer deflation deepened to its worst level in almost two years in May while consumer prices extended declines, as the economy grappled with headwinds from trade tensions and a prolonged housing downturn. Uncertainties from a tariff war with the United States and weak consumption at home have rattled sentiment and fuelled expectations of more policy stimulus to combat deflationary pressures. The producer price index fell 3.3% in May from a year earlier, worse than a 2.7% decline in April and the deepest contraction in 22 months, National Bureau of Statistics data showed on Monday. That compared with an estimated 3.2% fall in a Reuters poll. Cooling factory activity highlights the impact of U.S. tariffs on the world's largest manufacturing hub, dampening faster services growth as suspense lingers over the outcome of U.S.-China trade talks set to resume in London on Monday. In a phone call on Thursday, U.S. President Donald Trump and Chinese leader Xi Jinping discussed trade tensions and critical minerals, leaving key issues for further negotiations. The consumer price index dipped 0.1% last month from a year earlier, after falling by the same amount in April and slightly better than a Reuters poll forecast of a 0.2% decline. CPI slid 0.2% on a monthly basis, compared with a 0.1% increase in April, and matched economists' predictions of a 0.2% decline. Retail sales growth slowed last month as spending continued to lag amid job insecurity and stagnant new home prices despite a recent raft of support measures. With households cautious about spending due to income pressures, some companies have resorted to price discounts to boost sales, prompting the authorities to urge an end to the auto industry's bruising price wars. The core inflation measure, excluding volatile food and fuel prices, registered a 0.6% year-on-year rise, slightly faster than a 0.5% increase in April
CNN
22 minutes ago
- CNN
Trump deploys National Guard to stop LA immigration protests, defying California's governor. Why experts call the move dangerous
Federal agencies US military Donald Trump Immigration FacebookTweetLink President Donald Trump ordered the deployment of 2,000 National Guard troops to quell immigration protests in Los Angeles, overriding California Gov. Gavin Newsom's objections in a rare move. This invocation of presidential powers that have remained dormant for decades signifies an escalation that challenges both state authority and long-established standards, some experts and political leaders say. Protests in and around Los Angeles erupted on Friday after federal immigration agents arrested at least 44 people. The arrests come amid Trump's crackdown on immigration, which has involved waves of raids and deportations across the country. Law enforcement used tear gas and flash bang grenades in an effort to disperse protesters over the weekend, but Trump said local officials had failed to deal with the unrest, and the federal government would 'solve the problem, RIOTS & LOOTERS, the way it should be solved!!!' he wrote in a post on his Truth Social platform. Trump signed a presidential memorandum deploying the National Guard to Los Angeles under Title 10 of the United States Code to 'temporarily protect ICE and other United States Government personnel who are performing Federal functions' as well as federal property, he announced in a memo to the attorney general and the secretaries of Defense and Homeland Security Saturday. Title 10 allows the president to deploy the National Guard as necessary to repel invasion, suppress rebellion or execute laws, which means the National Guard reports to the president rather than the governor. Trump's federalization of National Guard troops marks the first time a US chief executive has used such power since 1992, when the Los Angeles riots erupted after four White police officers were acquitted in the beating of Black motorist Rodney King. Dozens of people were killed, thousands injured and thousands were arrested during several days of rioting in Los Angeles. Property damage was estimated at more than $1 billion in one of the worst civil disturbances in US history. However, the deployment ordered by then-President George H.W. Bush, a Republican, occurred at the request of then-California Gov. Pete Wilson, another Republican. It is rare for a president to act without a governor's cooperation or request. In this case, Democrat Newsom has explicitly opposed Trump's deployment order. 'That move is purposefully inflammatory and will only escalate tensions,' Newsom said on X Saturday. 'This is the wrong mission and will erode public trust.' Trump earlier Sunday on Truth Social praised National Guard troops he greenlit to quash ongoing immigration protests in Southern California for doing a 'great job,' despite no evidence the troops were yet on the ground. Minutes after Trump posted on Truth Social, LA Mayor Karen Bass said on X, 'Just to be clear, the National Guard has not been deployed in the City of Los Angeles.' About 300 members of the National Guard arrived in Los Angeles later Sunday morning following two consecutive days of protests over immigration enforcement action, Izzy Gardon, communications director for Newsom, told CNN in an email Sunday. The League of United Latin American Citizens condemned Trump's order, saying the move 'marks a deeply troubling escalation in the administration's approach to immigration and civilian reaction to the use of military-style tactics.' Democratic Rep. Nanette Barragán of California agreed. 'We haven't asked for the help. We don't need the help. This is him escalating it, causing tensions to rise. It's only going to make things worse in a situation where people are already angry over immigration enforcement,' said Barragán, who represents the city of Paramount, where troops have been deployed. On Sunday afternoon, aerial footage showed masses of demonstrators blocking lanes in both directions of a Los Angeles freeway, disrupting traffic. Bass said at a Sunday evening news conference hundreds of people managed to reach the freeway with thousands more occupying the streets nearby. Protesters took to the streets near an initial protest site at the Metropolitan Detention Center after the Los Angeles Police Department declared the gathering 'unlawful.' The California Highway Patrol said in a post on X some people were arrested as authorities worked to reopen the freeway. Other federal mobilizations of the National Guard since World War II were made to support enforcement of the expansion of civil rights and ensure public order during the desegregation of Central High School in Little Rock, Arkansas, in 1957; the University of Mississippi in 1962; and the University of Alabama and Alabama's public schools in 1963, according to the National Guard's website. Guard units also came under federal control in 1967 to restore public order during the Detroit riots; in 1968 following the assassination of civil rights icon Dr. Martin Luther King Jr.; and in 1970 during the New York postal strike, according to the National Guard. Congress first authorized presidential mobilization of state militias in 1792, to help repel foreign invasions and suppress domestic insurrections, the Guard's website says. The biggest ever federalization of state militias was made by President Abraham Lincoln, when he called up 75,000 troops to fight the Confederacy and later support Reconstruction. After that, no president federalized state militias to prevent or quell civil disturbances until the 1957 Little Rock action, according to the website. What makes this situation different from most past federalizations? To start, the deployment came without a request from the state's governor. The last time this happened was 1965, according to Elizabeth Goitein, co-director of the Liberty and National Security Program at the Brennan Center for Justice, a progressive policy institute. President Lyndon B. Johnson federalized National Guard troops to protect civil rights demonstrators in Alabama that year. Protesters who set out from Selma were protected by over 3,000 National Guard troops, according to the National Archives. The protest march – the third attempt after previous marches were met with violence from state troopers – was led by Martin Luther King, Jr. and thousands of protesters walked to the State Capitol in Montgomery, where they delivered a voting rights petition to the governor. Goitein described Trump's deployment as 'extremely rare' in an interview with CNN's Jim Sciutto. She noted Johnson invoked the Insurrection Act – a move Trump hasn't taken yet. Asked Sunday whether he was prepared to invoke the law, Trump told reporters in New Jersey it 'depends whether or not there is an insurrection.' Historically, presidents have federalized National Guard deployment when requested by a governor whose resources are overwhelmed, such as during the LA riots or the aftermath of Hurricane Katrina in Louisiana – or when a governor defies a court order, such as the Little Rock desegregation case, when President Dwight Eisenhower federalized the National Guard to support the Supreme Court's Brown v. Board of Education decision. CNN senior national security analyst and former DHS official Juliette Kayyem called the Trump administration's response to this weekend's protests an extreme overreaction and said it is 'not rational given the threat we're seeing.' 'This scenario – some urban unrest handled directly by police and state authorities overruled by a president who is defying a governor – is without modern precedent,' Kayyem said in a post on X. 'A democracy does not deploy military for unrest that looks like this,' Kayyem told CNN on Saturday. Following Hurricane Katrina, about 7,000 National Guard troops were federalized to support New Orleans; ports and prisons were closed, the police force was not functional, and nearly 2,000 people died. 'The numbers, when you just compare this to Hurricane Katrina … an entire city and court system underwater, you get a sense of why Governor Newsom and local law enforcement are very concerned,' Kayyem said. 'The comparison to 2,000 (National Guard troops) for a couple of hundred protesters, you can just get a sense of the sort of reaction that the Trump White House is having,' she said. The administration's diminishing of the standards for deploying and federalizing the National Guard under Title 10 is concerning, Kayyem added. 'This is part of an overall reaching by the Trump White House to utilize federal military resources in civilian society, without an insurrection, without a major flood, without a major crisis, and in defiance of political leadership.' White House press secretary Karoline Leavitt said in a statement Trump called in the National Guard soldiers to 'address the lawlessness that has been allowed to fester' and 'violent mobs attacked ICE Officers and Federal Law Enforcement Agents.' Even in the face of violence, disruptions and civil unrest, Kayyem said deploying the National Guard under Title 10 without the governor's cooperation, especially when local law enforcement is already handling safety concerns, is unnecessary. 'A car on fire, some unrest, people arrested – those are things that we have seen in our society for a long time. They're not unique, and that is why we have law enforcement,' Kayyem said. 'If they don't know how to deal with it, they then ask for state resources, and if the state resources are overwhelmed, then the state generally turns to the federal government.' In nearby Compton, a vehicle was set on fire where protesters began to gather Saturday, video from CNN affiliate KABC showed. On Friday, video showed several projectiles being thrown at officers equipped with body armor and protective shields outside a Los Angeles federal detention center. Elsewhere in Los Angeles County, a crowd of protesters in Paramount became 'increasingly agitated, throwing objects and exhibiting violent behavior toward federal agents and deputy sheriffs,' the Los Angeles Sheriff's Department said in an advisory Saturday night. In response, the department requested extra resources countywide and deployed additional deputies. 'LA authorities are able to access law enforcement assistance at a moment's notice. We are in close coordination with the city and county, and there is currently no unmet need,' Newsom said in a post on X Saturday night. 'Trump is sending 2,000 National Guard troops into LA County — not to meet an unmet need, but to manufacture a crisis,' Newsom said in another post Sunday. Officials from the Trump administration described protesters as 'lawless rioters.' The Los Angeles Police Department, meanwhile, said Saturday's demonstrations within the city 'remained peaceful' and 'events concluded without incident.' When asked about the LA County Sheriff's Department describing protesters as exhibiting violent behavior, congresswoman Barragán said the violence was not coming from anti-immigration protesters. '(The sheriff) told me the situation in Paramount was under control, the people that were peacefully (protesting) have left. The situation was now across the street into the Compton area, and (these were) the unruly folks — that Saturday night crowd. The people that were there to actually protest immigration were gone,' Barragán said. 'We agree that if you're being violent, you should be arrested, you should be prosecuted,' she added. Because Trump's deployment of the National Guard has occurred in defiance of the governor's request, Kayyem predicts there is a higher likelihood the move will incite conflict. 'Our federalized troops are trained to do something, and that something is the use of force. They are not trained to de-escalate a political situation, civil unrest,' she said. US Secretary of Homeland Security Kristi Noem said the National Guard soldiers are in Los Angeles to maintain peace amid ongoing tensions between immigration enforcement authorities and demonstrators this weekend – but the rules of engagement remain unclear. Although Noem said the soldiers are there to 'provide security for operations and to make sure that we have peaceful protests,' she did not provide specifics about their activities on the ground. Kayyem said if the troops also lack clarity of mission, problems can arise. 'Without a definitive mission statement and without rules of engagement … there will be mistakes, and those mistakes will not only potentially harm civilians, they will also potentially harm other law enforcement,' Kayyem said. 'This is dangerous for the troops … and it's dangerous for a population that, even if you view them as hostile, do not deserve to be put in harm's way because of that hostility.' US Secretary of Defense Pete Hegseth said active duty Marines at Camp Pendleton will also be mobilized if the unrest continues. 'We need an administration that's not going to get to DEFCON 1 (the highest level of US military alerts) every time they see something on TV they don't like,' Kayyem said. 'Active Marines? That's just unheard of in the kind of situation we've seen.' Trump's decision to deploy the National Guard against Newsom's wishes comes on the heel of escalating tensions between the two leaders, with the president consistently targeting Democratic-led California in his efforts to use funding as leverage to enact his agenda. The administration is preparing to cancel a large swath of federal funding for California, according to multiple sources. Last month, Trump threatened to withhold federal funding from California over a transgender athlete's participation in a sporting event. The administration also recently cut $126.4 million in flood prevention funding projects, and even before his inauguration Trump repeatedly went after the state's handling of devastating wildfires earlier this year. The president and Newsom have also publicly feuded for years. 'I see these actions as kind of intentionally inflammatory from the White House, because they want this escalation,' CNN political analyst Astead Herndon said. 'They want this fight with Gavin Newsom, and they want to be able to use the levers of federal power in that fight.' 'It shows a feature of this administration, which is to use the levers of federal power against its enemies as a means of exerting its own ideological prism,' Herndon added. Human rights advocacy organization Amnesty International criticized the 'dangerous' deployment of National Guard troops, which the executive director says is 'to target and punish those who speak out in defense of human rights.' 'This is not about protecting communities,' the organization's executive director, Paul O'Brien, said in a statement. 'This is about crushing dissent and instilling fear.' CNN's Brad Lendon, Karina Tsui, Antoinette Radford, Zoe Sottile and Danya Gainor contributed to this report.
