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Import Restrictions Possible Under New Critical Minerals Strategy

Tuesday, June 11, 2019
Sandler, Travis & Rosenberg Trade Report

A new federal strategy aimed at ensuring secure and reliable supplies of critical minerals includes a recommendation that the U.S. examine how imports of these minerals are affecting national security, raising the prospect that import restrictions could be imposed at some point.

In May 2018 the Department of the Interior listed the following minerals as critical to U.S. security and economic prosperity: aluminum (bauxite), antimony, arsenic, barite, beryllium, bismuth, cesium, chromium, cobalt, fluorspar, gallium, germanium, graphite (natural), hafnium, helium, indium, lithium, magnesium, manganese, niobium, platinum group metals, potash, the rare earth elements group, rhenium, rubidium, scandium, strontium, tantalum, tellurium, tin, titanium, tungsten, uranium, vanadium, and zirconium. These minerals are used in the production of goods such as cell phones, computers, automobiles, airplanes, advanced electronics, manufacturing equipment, transportation systems, defense systems, and cutting-edge medical devices.

Noting that imports comprise greater than 50 percent of annual U.S. consumption for 31 of the 35 minerals and 100 percent for 14 minerals, the Department of Commerce has issued a strategy to ensure the supply of these minerals and the resiliency of their supply chains. Among the goals included in the strategy are to enhance international trade and cooperation related to critical minerals.

One recommendation to achieve this goal is to increase trade with allies and partners. For example, the report notes, the U.S. should work with Canada and Mexico to develop their critical mineral deposits given that they supply all or part of U.S. consumption of many critical minerals and the U.S. has historical trade relationships, established logistics chains, and geographic proximity with them. This would reduce the U.S.’ reliance on critical mineral resources in countries that impose trade and investment restrictions and engage in conduct that distorts markets through unlawful or otherwise unfair competition (e.g., China).

Another recommendation is for the Bureau of Industry and Security to consider whether the circumstances of U.S. reliance on imports of critical minerals merit investigations to determine the effect on U.S. national security. This could mean future Section 232 investigations similar to those that resulted in import restrictions on steel and aluminum products in 2018 as well as those currently underway that could yield similar measures against automobiles, auto parts, and uranium.

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