Key Takeaways
- US and Japan sign critical minerals deal to secure rare earth supplies
- Agreement aims to reduce dependence on China, which dominates global production
- Comes ahead of Trump’s meeting with Xi Jinping in South Korea
- Experts warn building alternative supply chains could take a decade
The United States and Japan have entered a “golden age” of relations with a new agreement to secure critical minerals and rare earth supplies. Signed during President Donald Trump’s Tokyo visit, the pact represents Washington’s strategic push to diversify supply chains away from Chinese dominance.
According to the White House, the framework ensures “resilience and security of critical minerals and rare earths supply chains.” This follows similar agreements with Malaysia and Thailand, marking a coordinated Indo-Pacific effort to secure resources essential for electric vehicles, smartphones, and military technology.
China’s Rare Earth Dominance
The timing is crucial. China currently controls approximately 70% of global rare earth mining and nearly 90% of refining capacity. Beijing’s recent expansion of export controls, requiring government approval for products containing even trace amounts, has been described by US Treasury Secretary Scott Bessent as “China pointing a bazooka at the world’s supply chains.”
Trump’s counter-strategy involves building alliances across the region. Following an $8.5 billion US-Australia framework, he signed deals with Malaysia and Thailand. “In about a year from now, we’ll have so much critical mineral and rare earths, and you won’t know what to do with them,” Trump declared confidently.
However, experts caution this optimism may be premature. “China is too far ahead of the world,” said John Mavrogenes, professor of economic geology at Australian National University, estimating alternative supply chains could require a decade to fully develop.
Strategic Message Before Xi Meeting
The Japan agreement carries significant symbolism ahead of Trump’s expected meeting with Chinese President Xi Jinping in South Korea. Analysts view it as a clear signal that Washington is fortifying supply lines with trusted allies.
“By building alternative networks, the US increases its leverage in negotiations with China,” Charles Chang of Fudan University explained. “Even if production takes time, it changes the dynamics.”
During the ceremony, Prime Minister Sanae Takaichi called the US-Japan alliance “the greatest alliance in the world” and pledged to build a “new golden era” in relations. The leaders also signed a declaration reaffirming America’s strategic commitment to Japan amid shifting power dynamics in Asia.
The diplomatic gestures extended beyond minerals, with Takaichi presenting 250 cherry trees for America’s 250th anniversary and fireworks for July 4th celebrations, reinforcing friendship amid hard-nosed diplomacy.
