HOUSTON – The Trump administration’s proposal to create a new critical minerals trading bloc with allies and partners has got off to a tentative start, with its contours likely to emerge in the months to come.
Japan, the European Union and Mexico have shown keenness to explore the US proposal for a preferential trading zone with coordinated price floors for critical minerals.
China’s overwhelming dominance of many critical minerals – indispensable to cutting-edge artificial intelligence economies, defence industries and energy infrastructure – and its readiness to deploy it as leverage is a prime source of geopolitical tensions.
The country was not mentioned by name in speeches by US officials at the Critical Minerals Ministerial meeting hosted by Secretary of State Marco Rubio in Washington on Feb 4.
But the proposed trading bloc is an attempt to prevent China from pressing its advantage, allegedly flooding global markets with cheap minerals and undermining other nations and their companies from developing their own mines and refineries.
Most of the 50-odd nations gathered to discuss the issue have not yet offered opinions on the trading bloc nor committed to joining it.
Singapore has not commented on the matter.
In a social media post, Foreign Minister Vivian Balakrishnan said he attended the meeting at the invitation of Mr Rubio to discuss ways to strengthen critical minerals supply chains.
“Singapore is a trusted and reliable hub in global supply chains,” Dr Balakrishnan wrote on Facebook.
“We believe in open, rules-based trade and will continue to play our part in keeping these supply chains resilient,” he added, while noting the importance of minerals such as nickel, lithium and cobalt.
“Critical minerals are essential to everything from semiconductors and electric vehicles, to renewable energy systems and defence technologies. As countries accelerate their digital and green transitions, access to critical minerals is increasingly a matter of economic competitiveness and national security,” Dr Balakrishnan said.
“Happy to have also caught up with Secretary Rubio and other counterparts at the meeting,” he added.
Singapore is a member of the US-led Pax Silica initiative
launched in December 2025 to secure AI supply chains – focused on semiconductors, silicon production, data centres and energy – through trusted alliances.
Japan, South Korea, Australia, Britain, Israel, Qatar and the United Arab Emirates are other members. India is expected to join later in February.
The US is fully dependent on imports of 12 critical minerals and reliant on imports for more than half of its consumption of an additional 29. Networking with allies and partners is critical to its ability to enhance supply and reduce dependence on China
.
The proposal for a trading bloc was unveiled at the start of the meeting by US Vice-President J.D. Vance who floated the idea of a “preferential trade zone for critical minerals, protected from external disruptions through enforceable price floors”. He said prices would be maintained through “adjustable tariffs”.
Neither he nor Mr Rubio mentioned China but expressed frustration at its ability to undercut Western companies. China accounts for 60 per cent of rare earths deposits and almost 90 per cent of the processing capacity necessary to turn the minerals into useful products like rare earths magnets.
“We want to eliminate that problem of people flooding into our markets with cheap critical minerals to undercut our domestic manufacturers because we know... that as soon as they’ve undercut our domestic makers, they’d leave the market and the people who undercut them then jack up the price to a completely unfair level,” Mr Vance said.
“We want members to form a trading bloc among allies and partners,” he said, promising that the benefits would be “immediate and durable” to those who signed on.
“To those of you still on the fence, I say: Let’s move together. What is before all of us is an opportunity at self-reliance, that we never have to rely on anybody else, except for each other, for the critical minerals necessary to sustain our industries and to sustain growth,” Mr Vance added.
Mr Rubio noted that critical minerals supply was “heavily concentrated in the hands of one country”.
“And that lends itself to, at worst-case scenario, being used as a tool of leverage in geopolitics, but it also lends itself to any sort of disruptions, like a pandemic or... political instability,” he said.
Japan’s Minister of State for Foreign Affairs Iwao Horii said Tokyo was fully on board with the US initiative and would work with as many countries as possible to ensure its success.
“Critical minerals and (their) stable supply is indispensable to the sustainable development of the global economy,” he said.
The US Trade Representative’s (USTR) office said the US, Japan and the EU will conclude a memorandum of understanding within 30 days on how they can jointly support projects in mining, refining, processing and recycling, the governments said in a joint statement.
“Today’s announcement is an important signal that the world’s largest market-oriented economies are committed to developing a new paradigm for preferential trade in critical minerals,” said USTR Jamieson Greer in a press statement.
“Through the development of these action plans, we will lay the groundwork for a binding plurilateral agreement on trade in critical minerals with like-minded partners,” Mr Greer said.
The US and Mexico will implement a similar action plan over the next 60 days, another USTR statement said.
India’s foreign minister S. Jaishankar said he had “underlined challenges of excessive concentration and the importance of de-risking supply chains through structured international cooperation” in his speech at the meeting.
“Conveyed India’s support to the FORGE initiative on critical minerals,” he said on social media platform X, referencing the White House plan, which is known as the “Forum on Resource Geostrategic Engagement”.
Delegations from South Korea, Malaysia, Thailand, the Philippines and Australia were also present at the meeting while Denmark and its semi-autonomous mineral-rich province of Greenland did not attend.
As talks progressed in Washington, Mr Trump, who is expected to visit China in April, posted on Truth Social that he had an “excellent” call with Chinese President Xi Jinping. They discussed a range of trade and security issues, from China’s commitment to buy soya beans to aeroplanes to Iran.
Critical minerals were not mentioned.
But there was a somewhat muted response to the US proposal from the Chinese Embassy in Washington.
“China has long played an important and constructive role in keeping the global industrial and supply chains of critical minerals safe and stable, and is willing to continue to make active efforts in this regard,” the embassy said.
