RPT-BREAKINGVIEWS-US minerals push strains against anti-green pull

By Gabriel Rubin

WASHINGTON, Feb 5 (Reuters Breakingviews) - The Trump administration’s plan to rival China in producing critical minerals started with a curious first step: destroy demand. Now, as it tries to encourage investments in home-spun metals and rocks, the White House is pushing a $12 billion public-private partnership to create a stockpile. The goal of removing international chokepoints from supply chains makes eminent sense. Getting there would have been easier without policies that cut against electric vehicles and green tech that are major customers for such minerals.

A critical minerals summit in Washington this week almost resembled the era of global trade policy coordination pursued by former President Joe Biden. Representatives from Japan, Australia, and dozens of other countries gathered to figure out how to build supply chains for lithium, copper, gallium, tungsten, and 50-plus other minerals vital to modern manufacturing that avoids China, currently the dominant miner and refiner across the board.

Such contortions amid an all-fronts trade war would have been less existential had the Trump administration not subdued domestic demand. The president’s signature tax and spending law eliminated a $7,500 consumer tax credit for EVs as of October, leading to a 46% plunge in U.S. EV sales in the fourth quarter of 2025. An advanced manufacturing tax credit from Biden’s 2022 energy law, aimed at critical mineral production, survived thanks to industry lobbying, but with extra requirements that make compliance more onerous and limit uptake.

The scale of the clean energy rollback can be seen in canceled corporate commitments. General Motors GM.N took a $6 billion writedown tied to scaled-back EV plans, while Ford F.N expects to take a $19.5 billion hit. Scrapped projects and clawed-back grants led to the cancellation of $21 billion worth of battery and EV investments in the U.S. in 2025 alone, according to E2, a clean energy consultancy.

From magnets to battery materials like lithium and beyond, EVs are huge consumers of critical minerals. Just look at neodymium-praseodymium miner MP Materials MP.N, which in 2020 pointed to electric transportation and wind turbines – another target of Trump’s ire – as constituting a quarter of its market, and its most promising growth area.

To send positive demand signals, the administration now needs to employ byzantine tools. For the new stockpile, it’s tapping the Export-Import Bank to provide financing that doesn’t need congressional funding. This comes after even more pathbreaking moves, such as taking stakes in miners like MP. At the end of the day, though, $12 billion is a pittance compared to the might of the American consumer. There is no government replacement for 16 million annual car purchases.

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CONTEXT NEWS

U.S. President Donald Trump on February 2 announced a new strategic stockpile of critical minerals, called Project Vault, backed by $10 billion in seed funding from the U.S. Export-Import Bank and $2 billion in private funding.

The effort came as part of a 50-nation summit on critical minerals where the United States unveiled plans to marshal allies into a preferential trade bloc, proposing coordinated price floors as Washington escalates efforts to loosen China's dominance in materials crucial to advanced manufacturing.