Five months ago, I wrote an essay for Foreign Affairs where I argued that “open plurilateralism”—groups of like-minded countries coming together to define a set of rules—would rise from the ashes of the fully multilateral rules-based global system. These coalitions of the willing would share interest in working together in specific areas, even in the absence of more traditional trade agreements and outside the reliance on legacy international institutions. The question was whether the United States would play a role in developing this network of agreements or choose to go it alone. As it turns out, this phenomenon is playing out in real time, with the United States leading the way.
Take this week’s critical minerals ministerial in Washington, where representatives from more than fifty countries—from Angola to Uzbekistan—met to lay the foundations of a new critical minerals value chain designed to break China’s dominant market position. At the ministerial, the United States pitched its new Forum on Resource Geostrategic Engagement (FORGE) initiative, a coalition of countries aimed at quickly scaling up public and private investment in critical minerals supply chains. Or as Vice President JD Vance described it, FORGE is a “preferential trade zone for critical minerals protected from external disruptions through enforceable price floors.” The new initiative follows the Pax Silica, an earlier plurilateral initiative for secure artificial intelligence (AI) supply chains.
The Trump administration has proven willing not only to convene these initiatives but to back them with significant taxpayer resources. In the past six months, the administration has announced plans to deploy tens of billions of dollars in public capital—taking equity stakes in and extending credit to strategic firms—in an effort to reengineer entire global supply chains. In this vein, it rolled out a new U.S. Export-Import Bank-led effort to establish a domestic strategic reserve for critical minerals, Project Vault, to spur production and insulate producers from future supply shocks. The sixty-day reserve will be backed by a $10 billion loan from EXIM (more than double the largest financing in its history) along with $2 billion in private funding. As President Donald Trump put it, “We don’t want to ever go through what we went through a year ago”—that is, when China demonstrated it controlled chokepoints critical to both U.S. national security and the well-being of the U.S. and global economies.
This approach is not without risk. In total, over the past six months, the U.S. government has announced more than $30 billion of direct funding commitments—not tax breaks or indirect subsidies—related to critical minerals. In a number of cases, the government is taking a direct equity stakes in private companies, pushing the envelope of industrial policy into the realm of state capitalism. The taxpayer stands to lose a great deal if these investments and loans go south. As in the case of semiconductor chips, an industrial policy for critical minerals, given the national security implications of being dependent on China, might well be worth it. That said, losing money rarely makes for good politics. Anybody remember Solyndra?
Then there is the question of the overall strategy. Does it make sense to pursue an industrial policy designed to compete with China on its terms, to try to replicate the mining and processing assets that China has spent decades building up? Or should we try to circumvent China’s efforts to achieve dominance in critical minerals by leaning into the U.S. strength in innovation? My colleague Heidi Crebo-Rediker, CFR senior fellow, and Mahnaz Khan, vice president of policy for critical supply chains at Silverado Policy Accelerator, published a Council Special Report yesterday arguing that the United States “should seek to leapfrog China’s dominance by scaling disruptive innovation, recovery, and recycling” rather than striving to “out-mine, out-process, or out-fund China.” Cost, environmental harm, long permitting timelines, and commercial viability have historically held the United States back from investing in domestic mining and processing as these facilities take years to come online and cost billions of dollars upfront.
Whether we try to out compete China or leapfrog it, allies are going to be critical to our success. The Trump administration has long stated that America First does not mean America alone, but in the aftermath of a year of disruptive diplomacy, culminating most recently with the tension over Greenland with the rest of NATO, many have asked how willing other countries are to work with us. One of the lessons to be drawn from the critical minerals ministerial this week is that, in the end, whether or not they like how they are being treated by the United States, countries will ultimately act according to their national interests. We might be an increasingly difficult partner, but on a number of issues, we remain indispensable.
This isn’t to say that the United States should disregard how it treats its allies and partners. There will be times when we want to bring together allies and partners on issues that might serve U.S. interests more than their own. Other countries have domestic politics too and, based on many of their recent statements, our goodwill is diminishing. However, at least on the issue of reducing dependence on China, and at least for now, a broad range of countries are willing to join a U.S.-led coalition of the willing.
Next week, like hundreds of others, I will head across the pond to the Munich Security Conference, where serious policy discussions on the defense industrial base, secure supply chains, and, of course, Ukraine should take place. Last year, Vance upended the conference with a speech that was interpreted by many as weighing into German domestic politics on behalf of the right-wing Alternative for Germany (AfD) party two weeks before an election. This year, all eyes will be on Secretary of State Marco Rubio, who is expected to lead the U.S. delegation. The question will be whether the United States is going to Munich to further disquiet alliance members or to develop coalitions of the ambitious willing to address the major issues facing peace and security.
Let me know what you think about the critical minerals ministerial and what this column should cover next by replying to president@cfr.org.
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What I’m tuning into this week:
