Donald Trump launches critical minerals probe to weigh new tariffs

By Kate Sullivan and Ari Natter

 

President Donald Trump launched a probe into the need for tariffs on critical minerals, the latest action in an expanding trade war that has targeted key sectors of the global economy.

 

The order, which Trump signed on Tuesday, calls for the commerce secretary to initiate a Section 232 investigation under the Trade Expansion Act of 1962 to “evaluate the impact of imports of these materials on America’s security and resilience,” according to a White House fact sheet.

 

If the secretary finds that imports of critical minerals threaten to “impair national security and the President decides to impose tariffs,” those levies would take the place of current so-called reciprocal duties Trump announced earlier this month on US trading partners. 

 

 

The order covers critical minerals, including rare earth elements, casting them as critical “building blocks of our defense industrial base” and crucial to building jet engines, missile guidance systems, advanced computers, as well as radar, optics and communications equipment. The order also covers uranium as well as processed critical minerals and derivative products.

 

Under the law, the Commerce secretary is expected to deliver the results of his investigation within 270 days.

 

Trump had signaled the move in recent days, suggesting that his administration could consider levies on critical minerals, following other sector-specific tariffs he has imposed on steel and aluminum, automobiles and car parts. On Monday, the administration also announced that they had initiated investigations into semiconductors and pharmaceutical imports — also led by the Commerce Department.

 

Trump last month also invoked emergency powers to boost the ability of the US to produce critical minerals — part of a broad effort to ramp up development of domestic natural resources and make the country less reliant on foreign imports. That order seeks to provide financing, loans and other investment support to domestically process critical minerals. 

 

Despite possessing some critical minerals, the US currently imports a significant amount, creating economic and security risks, according to the White House. The administration said the US is import-reliant on at least 15 critical minerals and that 70% of imports of rare earths come from China. 

 

Critical minerals are used in a range of defense, autos, space travel, batteries and other equipment, but the US relies on China and other nations for most of its supply.

 

Trump’s order comes as China retaliates to US tariffs in the form of new export restrictions on the minerals, which are expected to have broad impacts across the US, Europe, and Japan. The latest list of restricted rare earths includes samarium, gadolinium, terbium, dysprosium, lutetium, scandium and yttrium, used in displays and powerful magnets, and crucial medical technology.

 

Trump has implemented sweeping tariffs in a bid to bolster US manufacturing and energy production and to bring in fresh revenue for the federal government. But those moves have rattled markets worried that the president’s levies will saddle consumers with higher prices, break international supply chains and reduce trade — potentially tipping the global economy into a downturn.

 

Trump earlier this month leveled — and then quickly paused — higher tariffs on about 60 US trading partners, in a bid to give those countries time to negotiate deals to avert the increased import duties. That pause, has not deterred the president from moving ahead on sectoral-specific tariffs.