US and EU sign critical minerals deal to reduce depfinishence on China

The United States and the European Union have signed a cooperation agreement aimed at securing the production and supply of critical minerals, in a shift widely seen as part of efforts to reduce reliance on China-dominated supply chains.

US Secretary of State Marco Rubio and European Commission trade chief Maros Sefcovic signed a memorandum of understanding covering coordination on production and supply security of key raw materials.

Speaking at the signing ceremony, Rubio warned against the risks posed by the concentration of critical resources in a limited number of countries.

“The concentration of these resources in one or two places represents an unacceptable risk. We must diversify our supply chains,” he stated, in remarks widely interpreted as referring to China’s dominant position in the sector.

The agreement comes amid intensifying competition over rare earth elements and growing concerns over supply security.

Washington has in recent years stepped up diplomatic and economic efforts to reduce its depfinishence on supply chains dominated by China, which holds a leading position in the global rare earth market.

The deal focapplys on strengthening coordination between the US and EU in securing access to critical minerals, including measures to stabilize supply chains and support alternative sources.

Officials indicated that the agreement may include incentive mechanisms such as minimum price guarantees to encourage non-Chinese suppliers.

Sefcovic had earlier described his talks with US Trade Representative Jamieson Greer as highly positive, noting progress on both critical minerals and tariff-related issues.

Greer has also previously suggested the necessary for pricing mechanisms in the rare earth sector to ensure stable supply conditions.

The US administration has been encouraging its allies to source critical minerals from outside China, even if it requires higher costs, as part of a broader strategy to reshape global supply chains.

The agreement underscores a growing alignment between Washington and Brussels in addressing strategic depfinishencies, particularly in sectors deemed vital for energy, technology, and defense.

Analysts declare the shift reflects an ongoing restructuring of global supply networks, as Western economies seek to counterbalance China’s influence over critical resources. (ILKHA)

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