U.S. and Allies Intensify Efforts to Reduce Reliance on Chinese Critical Minerals

On January 12, 2026, U.S. Treasury Secretary Scott Bessent hosted a high-level meeting in Washington, D.C., with finance ministers and senior officials from the Group of Seven (G7) nations, including Canada, France, Germany, Italy, Japan, the United Kingdom, and the European Union, as well as representatives from Australia, India, South Korea, and Mexico. The meeting aimed to address vulnerabilities in global supply chains for critical minerals, particularly rare earth elements, which are essential for defense technologies, semiconductors, and renewable energy systems.

China tightens mineral grip; US mobilises allies

The urgency of the meeting was underscored by recent Chinese export restrictions on rare earths and dual-use items to Japan, which have heightened concerns among G7 members about their heavy reliance on Chinese supplies. China currently dominates the global critical minerals market, refining between 47% and 87% of key materials such as copper, lithium, cobalt, and rare earths, according to the International Energy Agency.

Reuters

During the meeting, Bessent emphasized the need for "prudent derisking over decoupling," urging nations to strengthen supply chain resilience while maintaining open trade. He expressed optimism that participating countries recognized the urgency of addressing supply chain deficiencies. Japanese Finance Minister Satsuki Katayama highlighted a "broad agreement" among G7 nations on the need to swiftly reduce reliance on China for rare earths, proposing a range of policy measures, including financial incentives and trade measures.

The Straits Times

Germany's Finance Minister Lars Klingbeil also noted the importance of developing alternative supplies and warned against forming an anti-China coalition, stressing the need for Europe to accelerate its own resource development efforts.

The Straits Times

India's participation in the discussions, represented by Union Minister Ashwini Vaishnaw, reflects its emerging significance in the global critical minerals landscape. Vaishnaw emphasized the importance of secure access to critical minerals for enhancing India's manufacturing capabilities and achieving its goal of becoming a global manufacturing hub. The U.S. and India have been strengthening their cooperation in this sector, with India launching the National Critical Mineral Mission to secure supply chains and reduce import dependence.

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Despite the collaborative efforts, some analysts have expressed skepticism about the feasibility of the U.S. and G7's goals. Chinese experts have pointed out that the current supply-demand dynamics and differing political interests among countries may hinder the effectiveness of these initiatives. They argue that while the U.S. seeks to reduce reliance on China, many G7 members may not share the same urgency or strategic rivalry, preferring a more cautious approach.

Global Times

The U.S. Treasury is expected to issue a statement following the meeting, although a binding joint action plan is unlikely at this stage. The discussions are part of a broader strategy among advanced economies to diversify critical mineral supply chains and reduce vulnerabilities. As geopolitical tensions continue to shape global supply chains, the focus on critical minerals is likely to remain a central topic in future G7 meetings.

US convenes allies to strengthen critical minerals supply chains

• “At today’s Finance Ministerial hosted by the @USTreasury, I was pleased to hear a strong, shared desire to quickly address key vulnerabilities in critical minerals supply chains. I am optimistic that nations will pursue prudent derisking over decoupling and understand well the need for decisive action.” — Scott Bessent, U.S. Treasury Secretary

India’s Ashwini Vaishnaw Joins U.S.-Led Talks on Strengthening Critical Minerals Supply Chains

• “Japanese Finance Minister Satsuki Katayama told reporters on Friday that, “The fundamental consensus among the G-7 nations is that it is unacceptable for countries to secure monopolies through non-market means.” — Satsuki Katayama, Japanese Finance Minister

Washington Examiner

• “This is a concrete and positive step towards building resilience in critical raw materials on which Western countries are almost totally dependent,” — Giancarlo Giorgetti, Italian Finance Minister

CityLab

The meeting signifies a critical moment in international efforts to secure reliable sources of essential minerals, reflecting the growing recognition of their importance in national security and economic stability.

India-US critical minerals meet: Ashwini Vaishnaw shares key takeaways