US launches Section 232 investigation into critical minerals imports
The Trump administration has ordered a probe into imports of processed critical minerals and rare earth elements (REEs), which underpin US national and economic security. This move marks the latest effort to address US supply chain vulnerabilities and reduce strategic dependence on China.
“The investigation highlights growing US concerns over its reliance on China for processed minerals and REEs, especially amid escalating trade tensions,” said Bryan Bille, principal policy and geopolitical analyst at Benchmark.
It follows Beijing’s decision to impose export restrictions on medium and heavy REEs and permanent magnets,critical to US defence technologies, last week. A Section 232 investigation was previously used by President Trump to impose a 25% global tariff on steel and aluminum, as well as to examinecopper imports earlier this year.
A final report is expected within 180 days, outlining policy recommendations that could include tariffs and import restrictions on critical minerals and REEs, or expanded federal support for domestic production, processing, and recycling capacity.
US lacks domestic processing capabilities
The US has limited capacity for extracting and processing raw materials used in batteries. Imports of key battery inputs— copper, nickel, cobalt, lithium, natural graphite, and synthetic graphite—were valued at $11.7 billion in 2024, according to Benchmark analysis.
Chile is a key source of copper and lithium imports, accounting for 70% and 60% of the total imports, respectively. Meanwhile, China is the predominant source of flake and synthetic graphite imports, as well as REEs.
Even where domestic mining does exist, such as for copper and REEs, the US lacks sufficient processing infrastructure and remains dependent on other countries, particularly China, to upgrade the material.
Tariffs alone will not address structural limitations in the medium to long term. Permitting delays are a major obstacle to bringing new domestic mining and processing capacity online, and have been akey area of focus for the Trump administration.
To de-risk projects and attract private investment, especially in the current low-price, high-volatility environment, additional policy support is needed. This may include government-backed offtake agreements to incentivise domestic processing projects, as well as temporary price support mechanisms.
Despite efforts to boost local mining, the US will continue to rely on imports of critical minerals to meet growing domestic demand, particularly for nickel, cobalt, and graphite. This underscores the need for expanded investment and diplomatic engagement in foreign strategic mineral projects in resource-rich regions.
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