The Trump administration’s push to create a Western critical minerals trading bloc is facing significant headwinds from sceptical G7 allies and a divided mining industry, with negotiations over price supports, governance structures and enforcement mechanisms producing more disagreement than consensus ahead of the G7 leaders’ summit in France.
The bloc concept, first proposed by Vice President JD Vance in February, aims to help Western nations reduce dependence on China — which built its dominant position in cobalt, lithium, nickel, rare earths and other strategic minerals partly by operating at a loss and suppressing global prices, driving Western competitors out of business. The proposed measures include price supports, market standards, subsidies and guaranteed purchases, potentially enforced by adjustable tariffs to uphold pricing integrity.
A central sticking point is the US plan to use prices derived from the Pentagon’s DARPA-developed OPEN AI metals programme, designed to calculate what a mineral should cost when labour, processing and other inputs are factored in while alleged Chinese market manipulation is excluded. European allies have pushed back against this approach, with one source citing concerns about Washington having too much sway over EU pricing. “For Europe, it would be better to have a price index based on real deals in the European market,” said Nicola Beer, who oversees minerals financing at the European Investment Bank. As an alternative, EU-funded body EIT RawMaterials is working with digital platform Metalshub to create pricing indices outside Chinese government-led mechanisms that could include the US, Australia, Canada and the UK.
Governance is generating its own fractures. France, holding the G7 presidency, and Canada want a permanent administrative secretariat within the IEA or OECD to track initiatives as presidencies rotate. The US is reluctant. France and Canada also favour a multilateral trading bloc approach, while Washington wants to forge fast bilateral deals and expand them later. US Trade Representative Jamieson Greer said Washington aims to present proposals for binding bilateral agreements to Japan and the EU before the end of June, potentially covering five to ten minerals including heavy rare earths, antimony, graphite and tungsten — all subject to Chinese export bans or restrictions.
European officials say they want to study the impact of price supports on medium and long-term dynamics rather than commit to fast deals. A broader concern is who ultimately pays the premium for higher-priced minerals and how far down the supply chain any subsidy should extend — questions complicated by the fact that many Western nations import very few minerals in raw or lightly processed form.
Within the US itself, more than 230 public submissions to Greer’s office reveal a divided mining industry. General Motors, Umicore, Sibanye Stillwater, MP Materials and the US Chamber of Commerce all offered divergent proposals. The National Mining Association advised against price-fixing, recommending tax credits and incentives instead. “While market interventions such as pricing mechanisms may play a role in certain circumstances, incentive-based approaches are better suited to addressing challenges facing the domestic mining industry,” said its CEO Rich Nolan.
“There’s nervousness from all sides about what to do and how different actions could affect different parts of the supply chain,” said Blake Harden of EY.
