Trump orders tariff probe on critical mineral imports as China clamps down on rare earth export - What order states?

Amid the rising tension between the US and China, President Donald Trump on Tuesday ordered a probe into potential new tariffs on all US critical minerals imports.

It is important to note, China is the leading global producer of 30 out of the 50 minerals deemed critical by the US Geological Survey and has recently been cutting back on its exports.

Earlier several manufacturers, industry consultants, academics had mentioned that the US is overly reliant on Beijing and others for processed versions of the minerals. Trump's new order mentions the concern and said, the US dependency on minerals imports "raises the potential for risks to national security, defense readiness, price stability, and economic prosperity and resilience."

What the order states?

As per the order, Commerce Secretary Howard Lutnick is required to commence a national security review under Section 232 of the Trade Expansion Act of 1962. The same law was used in Trump's first term to impose 25% global tariffs on steel and aluminum. It was again used in February to launch a probe into potential copper tariffs.

Lutnick will have to file a report of his findings to Trump, including whether to impose tariffs, in next 3 months. Following the report, Trump will impose a tariff on a nation's critical minerals, the rate would supersede the reciprocal tariffs Trump imposed earlier this month, according to the White House.

The review will assess US vulnerabilities for the processing of all critical minerals - including cobalt, nickel and the 17 rare earths, as well as uranium - how foreign actors could be distorting markets, and what steps could be taken to boost domestic supply and recycling, according to the order.

How China toughening policies are threatening the US?

Beijing earlier this month placed export restrictions on rare earths in response to Trump's tariffs, a move that further exacerbated supply concerns amongst Trump officials.

Rare earths are a group of 17 elements used across the defense, electric vehicle, energy and electronics industries. The United States has only one rare earths mine and most of its processed supply comes from China.

The restrictions from China were seen as the latest demonstration of the country's ability to weaponize its dominance over the mining and processing of critical minerals after it put outright bans on the export of three other metals last year to the U.S. and slapped export controls on others.

Chinese mining companies across the globe have been flooding markets with cheap supplies of many critical minerals in recent years, fueling calls from industry and investors for Washington to support US projects.

How Trump pushing US to start its own mineral production and processing?

The US currently extracts and processes scant amounts of lithium, has only one nickel mine but no nickel smelter, and has no cobalt mine or refinery. While it has several copper mines, the US has only two copper smelters and is reliant on other nations to process that key red metal.

The new order is part of Trump’s push to boost US mineral production and processing. Last month, he signed an order asking federal agencies to list mines that could be fast-tracked and federal land for mineral processing.

However, building new mines and facilities takes years and it has raised concern about where theUS could procure minerals were tariffs broadly imposed

(With agency inputs)