Global leaders gather in Washington to forge a critical minerals alliance, aiming to reduce reliance on China and strengthen economic ties. This summit, attended by ministers from the US, UK, EU, Australia, and New Zealand, marks a significant step towards repairing transatlantic relations, which were strained by a year of conflict with Donald Trump. The meeting comes on the heels of Australia's announcement of a A$1.2bn strategic reserve of minerals vulnerable to supply disruptions from China, following their April export restrictions on rare earths. The focus of the discussions will be on securing a minimum price for critical minerals and rare earths, with the US potentially guaranteeing this. However, a recent report suggests that Washington has decided against this idea, causing a downward trend in shares in Australia, which has been positioning itself as a critical minerals alternative to China. The EU is also expected to press the US to drop its new global steel derivative tariffs, which could lead to punitive levies on steel-content products. The Trump administration has been convening multilateral consultations since October, when it agreed to a 12-month trade truce with China, which had threatened to choke off rare earth supplies in the escalating tariff dispute between them. These minerals have become essential raw materials for modern manufacturing, needed to produce everything from smartphones to fighter jets, wind turbines, and music speakers. Europe's supply of permanent magnets, which are made with rare earths, comes almost entirely from China. The EU uses 20,000 tonnes of permanent magnets a year, of which 17,000 to 18,000 tonnes come from China, with just 1,000 from the EU. This summit is a crucial step towards a more secure and resilient global supply chain, but the outcome will depend on the willingness of all parties to work together and find common ground.
