President Trump issued April 15 an executive order instructing the Bureau of Industry and Security to initiate a Section 232 investigation of the national security effects of imports of processed critical minerals and their derivative products. This investigation could result in the imposition of Section 232 tariffs on such goods, , which would replace the “reciprocal” tariffs currently in place.
The EO defines critical minerals as those included in the Critical Minerals List published by the U.S. Geological Survey pursuant to 30 USC 1606, plus uranium. The most recent USGS list was published in February 2022 and contains the following 50 minerals, though USGS noted at the time that federal law requires a review and update of this list at least every three years.
- aluminum, used in almost all sectors of the economy
- antimony, used in lead-acid batteries and flame retardants
- arsenic, used in semi-conductors
- barite, used in hydrocarbon production
- beryllium, used as an alloying agent in aerospace and defense industries
- bismuth, used in medical and atomic research
- cerium, used in catalytic converters, ceramics, glass, metallurgy, and polishing compounds
- cesium, used in research and development
- chromium, used primarily in stainless steel and other alloys
- cobalt, used in rechargeable batteries and superalloys
- dysprosium, used in permanent magnets, data storage devices, and lasers
- erbium, used in fiber optics, optical amplifiers, lasers, and glass colorants
- europium, used in phosphors and nuclear control rods
- fluorspar, used in the manufacture of aluminum, cement, steel, gasoline, and fluorine chemicals
- gadolinium, used in medical imaging, permanent magnets, and steelmaking
- gallium, used for integrated circuits and optical devices like LEDs
- germanium, used for fiber optics and night vision applications
- graphite. used for lubricants, batteries, and fuel cells
- hafnium, used for nuclear control rods, alloys, and high-temperature ceramics
- holmium, used in permanent magnets, nuclear control rods, and lasers
- indium, used in liquid crystal display screens
- iridium, used as coating of anodes for electrochemical processes and as a chemical catalyst
- lanthanum, used to produce catalysts, ceramics, glass, polishing compounds, metallurgy, and batteries
- lithium, used for rechargeable batteries
- lutetium, used in scintillators for medical imaging, electronics, and some cancer therapies
- magnesium, used as an alloy and for reducing metals
- manganese, used in steelmaking and batteries
- neodymium, used in permanent magnets, rubber catalysts, and medical and industrial lasers
- nickel, used to make stainless steel, superalloys, and rechargeable batteries
- niobium, used mostly in steel and superalloys
- palladium, used in catalytic converters and as a catalyst agent
- platinum, used in catalytic converters
- praseodymium, used in permanent magnets, batteries, aerospace alloys, ceramics, and colorants
- rhodium, used in catalytic converters, electrical components, and as a catalyst
- rubidium, used for research and development in electronics
- ruthenium, used as catalysts, as well as electrical contacts and chip resistors in computers
- samarium, used in permanent magnets, as an absorber in nuclear reactors, and in cancer treatments
- scandium, used for alloys, ceramics, and fuel cells
- tantalum, used in electronic components, mostly capacitors and superalloys
- tellurium, used in solar cells and, thermoelectric devices and as alloying additive
- terbium, used in permanent magnets, fiber optics, lasers, and solid-state devices
- thulium, used in various metal alloys and lasers
- tin, used as protective coatings and alloys for steel
- titanium, used as a white pigment or metal alloys
- tungsten, primarily used to make wear-resistant metals
- vanadium, primarily used as alloying agent for iron and steel
- ytterbium, used for catalysts, scintillometers, lasers, and metallurgy
- yttrium, used for ceramic, catalysts, lasers, metallurgy, and phosphors
- zinc, primarily used in metallurgy to produce galvanized steel
- zirconium, used in high-temperature ceramics and corrosion-resistant alloys
Processed critical minerals are those that have undergone the activities that occur after critical mineral ore is extracted from a mine up through its conversion into a metal, metal powder, or master alloy. Derivative products include all goods that incorporate processed critical minerals as inputs, including semi-finished goods (e.g., semiconductor wafers, anodes, and cathodes) as well as final products (e.g., permanent magnets, motors, electric vehicles, batteries, smartphones, microprocessors, radar systems, wind turbines and their components, and advanced optical devices).
“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,” the EO states in explaining the need for this investigation. This poses a threat to economic security because these items “underpin key industries, drive technological innovation, and support critical infrastructure vital for a modern American economy.” It also poses a threat to national security because these items “are foundational to military infrastructure, energy infrastructure, and advanced defense systems and technologies.”
A draft BIS report is due within 90 days and a final report is due within 180 days. Recommendations for action could include the imposition of tariffs as well as other import restrictions; safeguards to avoid circumvention and weakening of any section 232 measures; policies to incentivize domestic production, processing, and recycling; and any additional measures that may be warranted to mitigate national security risks under the president’s authority pursuant to the International Emergency Economic Powers Act. A White House fact sheet noted that any Section 232 tariffs imposed “would take the place of the current reciprocal tariff rate” on covered goods.
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