US takes stock of critical minerals | The weekly recap

The US is finally developing a coherent strategy to break China's grip on critical minerals.

And it’s been a long time coming.

• China’s first critical mineral export controls – gallium and germanium – landed in the summer of 2023.
• Beijing then rolled out its industry-shaking controls on rare earth element (REE) exports ten months ago, in April 2025.

Before now, Washington had pushed a bunch of piecemeal initiatives to support domestic REE projects, most notably:

• The Department of Defense’s (DoD) investment in and offtake agreement with light REE producer MP Materials (July 2025)
• A USD 1.4 billion government partnership with magnet company Vulcan Elements and support for REE recycler and processor ReElement Technologies (November 2025)
• Nearly USD 1.6 billion in government funding for USA Rare Earth (January 2026)
• DoD deals in the tens of millions of USD to expand support for REE processing at Ucore Rare Metals (June 2025) and develop scandium production capabilities at Elk Creek Resources (August 2025)

But only recently has the US begun to develop a coherent, forward-looking strategy to strengthen upstream supply chains and properly counter China’s export control leverage.

Exhibit 1: On February 2, the US launched Project Vault to build a stockpile of critical minerals that can mitigate supply disruptions and dampen price spikes during future shocks.

Exhibit 2: On February 4, the US launched the Forum on Resource Geostrategic Engagement (FORGE) – an effort to build an international coalition to develop new supply chains outside of China and coordination on critical minerals investment and pricing.

• The US announced FORGE at the US State Department’s Critical Minerals Ministerial, which 54 countries reportedly attended.
• The initiative effectively replaces the Biden Administration’s ill-fated June 2022 Minerals Security Partnership.

Exhibit 3: Then there’s Pax Silica, the State Department’s December 2025 initiative to align trusted partners around the AI technology stack – from minerals and energy to chips and AI models – through information sharing and supply chain cooperation.

• The initial coalition of the US and seven co-signatories – Australia, Israel, Japan, South Korea, the Netherlands, Singapore, and the United Kingdom has since expanded to include Qatar and the United Arab Emirates (UAE).

So far so good – but all three mechanisms face major challenges.

First, stockpiling under Project Vault is key to long-term market management – but it’ll entail massive hurdles from the get-go.

• Beijing tightly controls the flow of key critical minerals, meaning new supplies will only come online gradually.
• When they do become available, the US will be competing with the rest of the world to snap them up – even as broader global demand is growing.

Second, FORGE – which reflects Washington’s belated recognition that diversifying supply chains away from China requires international coordination – must overcome a credibility gap of Washington’s own making.

The US’s core message at the Critical Minerals Ministerial was simple: Everyone needs to work together to ensure their own security.

That’s a good idea in principle, but in practice, US tariffs, aggressive trade measures, and even security threats directed at allies have led many countries to question whether Washington can be counted on as a reliable long-term partner.

• Making matters worse, many of the countries Washington is courting see themselves as collateral damage in a US-China supply chain confrontation, for which the US shares responsibility.
• That isn’t a great starting point for building a partnership.

Then there’s FORGE’s other ambition: To develop a broad multilateral price-floor mechanism that spans global producers, effectively counteracting China’s price-setting power.

• Such an undertaking is incredibly complex by nature, made even harder by the trust gaps I mentioned above.

Third, Pax Silica, for its part, faces two critical gaps:

• Taiwan is not a signatory, meaning TSMC is not involved. Taiwan can hardly be blamed – joining would be a major provocation to Beijing – but there’s no semiconductor supply chain security without TSMC.
• Similarly, the EU is not a signatory – meaning the Netherlands’  ASML is not in the core group. ASML is irreplaceable in the chip supply chain.

The upshot: The US is finally getting its act together and (literally, in some instances) moving the earth to extricate itself from foundational dependencies.

• Yet for all the financial and political capital Washington is willing to spend, it’s clear that there is no easy way to replace China.

So, where does that all leave us?

This is not a story about rapid decoupling.

• It’s a story about leverage management.

More global cooperation is inevitable, given China’s leverage over critical minerals. Yet cooperation will coexist with continued dependence.

• Countries will pursue US funding and offtake deals.
• Firms will continue sourcing from China where it remains cheapest and most reliable.

The bigger picture: The US can dilute China’s leverage at the margins – but replacing it outright will take years and extraordinary political cohesion.

• Until then, Washington is playing for resilience, not supremacy.

Cory Combs, Head of Supply Chain and Critical Minerals Research, Trivium China

What you missed

Econ and finance

Consumer prices (CPI) grew 0.2% y/y in January, down sharply from 0.8% growth the previous month.

• That may look bad – but the softening in CPI inflation was driven by seasonal effects from Chinese New Year starting in January last year.
• Meanwhile, producer price deflation slowed to see its smallest decline in 18 months.
• Producer prices (PPI) shrunk 1.4% y/y, compared to a 1.9% decline in December. On a monthly basis, PPI surged 0.4% m/m.

On Monday, the three mainland stock exchanges – Shanghai, Shenzhen, and Beijing – announced that unprofitable tech companies will now be allowed to raise funds from investors six months after their IPO.

• Previous rules mandated a minimum 18-month wait.
• Additionally, any listed tech company whose stock is trading below its IPO price is now permitted to issue convertible bonds or raise funds via private share placements, as long as the funds go toward the firm’s core business.
• Previously, the exchanges strictly barred such companies from refinancing.

Tech

One day after ByteDance’s new video generation model, seedance 2.0, went viral, the company reportedly banned users from uploading photos of real humans for video generation.

• ByteDance hasn’t explained, but this looks like preemptive risk control to avoid public backlash or legal trouble.
• The walk-back may have been triggered by a video created by Tim, the owner of Mediastorm, one of Bilibili’s most popular tech review channels.
• Tim uploaded his own photo to seedance 2.0, which then generated a video of “Tim” speaking, in his own voice, without any voice reference data.

On Tuesday, the industrial regulator (MIIT) and four other agencies set an ambitious target for the low-altitude economy: achieving 90% mobile network coverage along public low-altitude air routes nationwide by 2027.

• The plan aims to combine existing mobile networks with satellite technology to cover different segments of low-altitude airspace (typically below 1,000 meters). 
• China’s 5G coverage already exceeds 95% nationwide, but traditional 5G can only stably cover up to ~120 meters in altitude.

Agriculture and rural affairs

Beijing is institutionalizing its poverty alleviation campaign as a feature of rural social assistance, per the 2026 No.1 Document released on February 3.

• The 2026 No. 1 Document – the annual rural policy guidance from the Party Central Committee and State Council – instructs officials to set up “normalized” social assistance systems.

• This includes ongoing monitoring to identify rural households at risk of falling into poverty, and continuing support until formal “exit criteria” are met.
• It also stipulates better mechanisms for setting and adjusting rural “minimum livelihood guarantee” (dibao) rates – monthly cash transfers for low-income households that are administered at the province level.

Foreign affairs

On February 8, Japanese Prime Minister Sanae Takaichi led her Liberal Democratic Party (LDP) to a landslide victory in a snap election, securing a two-thirds supermajority in the House of Representatives.

• The vote came amid the widening diplomatic and trade dispute with Beijing, sparked by Takaichi’s remarks on Taiwan in November.
• At a presser on Monday, Chinese foreign ministry spokesperson Lin Jian again urged Takaichi to retract her “erroneous remarks” on Taiwan: “If far-right forces in Japan…act recklessly, they will face resistance from the Japanese people and a head-on response from the international community.”

US-China

US President Donald Trump has reportedly booked a trip to China for the first week of April. Assuming the trip goes ahead, here’s some of what we’ll be looking for:

• Chinese agreements to make major purchases of key US products, which Trump can claim as a win
• Any rollback of China-focused sanctions, export controls, or other economic restrictions by the US
• Discussions of security issues in the Asia-Pacific, including Chinese efforts to extract concessions from the US on Taiwan

Meanwhile, the US is reportedly putting together a huge new weapons package sale for Taiwan.

• In December, Washington approved a USD 11.1 billion weapons package for Taiwan – the largest such arms deal in history.
• According to the Financial Times (FT), the new package may be much bigger: “Several people familiar with the situation said the package could be as big as $20bn.”
• FT sources report that Beijing has warned Washington the sale could derail Trump’s planned visit.

As always, it was a busy week in China.

• Thank goodness Trivium China is here to make sure you don’t miss any of the developments that matter.