Background

The Biden administration announced Feb. 22 “major investments” to expand the domestic supply chain for critical minerals to decrease the U.S.’ reliance on foreign sources. “China controls most of the global market in these minerals, and the fact [is] that we can’t build a future that’s made in America if we ourselves are dependent on China for the materials that power the products of today and tomorrow,” President Biden said.

A White House fact sheet said critical minerals, including rare earth elements, lithium, and cobalt, “provide the building blocks for many modern technologies and are essential to our national security and economic prosperity.” They are found in a wide range of products, from computers to household appliances, and are also key inputs in clean energy technologies like batteries, electric vehicles, wind turbines, and solar panels. Global demand for them is set to increase by 400-600 percent over the next several decades, Biden said, but “up to now we’ve had to import a significant portion of them … from other countries, particularly China, Australia, and Chile.”

Following a review of vulnerabilities in U.S. critical mineral and material supply chains that identified “over-reliance on foreign sources and adversarial nations” for these goods as threats to national and economic security, the Biden administration has announced new investments designed to increase domestic production. These include a facility that will establish “a full end-to-end” domestic supply chain for the magnets that power electric vehicle motors, wind turbines, etc. (noting that China currently controls 87 percent of the global permanent magnet market) as well as programs to increase, improve, or establish the extraction, refining, and recycling of critical minerals in the U.S.

In a related move, the Department of the Interior will be updating a federal list of critical minerals deemed essential to economic or national security and vulnerable to disruption. The first iteration of this list issued in May 2018 included 35 minerals and the new one is expected to add two and remove four.

The Department of Commerce released in June 2019 a strategy to ensure the supply of these minerals and the resiliency of their supply chains that included a focus on enhancing international trade and cooperation related to critical minerals. In September 2020 President Trump issued an executive order directing federal agencies to go further, including reporting on whether tariffs, quotas, or other import restrictions are needed to lower the U.S.’ reliance on critical minerals from foreign suppliers.

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