Senior economic officials from the world’s leading advanced economies are intensifying efforts to secure alternative sources of rare earths, as China’s dominance of critical mineral supply chains increasingly intersects with trade tensions, national security concerns, and industrial policy.

High-Level Talks in Washington

Finance ministers from the G7 — Japan, Britain, France, Germany, Italy, Canada and the United States — met on Monday in Washington alongside officials from Australia, Mexico, South Korea and India. The meeting was convened by U.S. Treasury Secretary Scott Bessent and focused on reducing reliance on Chinese supplies of rare earths and other critical minerals.

U.S. Trade Representative Jamieson Greer, along with representatives from the U.S. Export-Import Bank and a major U.S. financial institution, also attended. No joint statement was issued following the talks.

Focus on Supply Chain Security

According to the U.S. Treasury, the discussions centered on securing and diversifying supply chains for critical minerals, with particular emphasis on rare earth elements. Bessent expressed optimism that participating countries would pursue a strategy of managing risk rather than pursuing a full economic break from China.

Ahead of the meeting, a U.S. official said Bessent planned to press allies to intensify efforts to reduce dependence on Chinese minerals, especially after Beijing imposed tighter export controls, including recent restrictions affecting Japan.

Broad Agreement Among Participants

Japan’s Finance Minister Satsuki Katayama said there was widespread consensus on the urgency of cutting reliance on China for rare earths. She outlined a multi-stage strategy — short-, medium- and long-term — aimed at strengthening non-Chinese supply chains among G7 and like-minded countries.

Proposed measures include building markets based on labor and human rights standards, expanding the use of public financial institutions, offering tax and financial incentives, deploying trade and tariff tools, applying quarantine measures, and considering minimum price-setting mechanisms. She emphasized the need for concrete commitments rather than prolonged discussion.

China’s Dominance and Strategic Concerns

Countries participating in the meeting, together with the European Union, account for roughly 60% of global demand for critical minerals. China, however, dominates processing and refining, handling between nearly half and more than four-fifths of global supplies of copper, lithium, cobalt, graphite and rare earths, according to international energy data.

These materials are essential for defense systems, semiconductors, renewable energy technologies, battery production and industrial refining. Last week, China banned exports of certain dual-use items — with both civilian and military applications — destined for Japan’s military, including some critical minerals.

Caution Against a Confrontational Approach

Germany’s Finance Minister Lars Klingbeil said the talks included early discussions on establishing rare-earth price floors and forming partnerships to boost alternative supplies, while noting that many technical and political questions remain unresolved.

He said rare earths and critical minerals will be a central issue during France’s presidency of the G7 this year, but warned against framing the effort as an anti-China coalition. Instead, he argued that Europe must act more decisively to develop its own raw material capacities.

“Waiting, complaining or self-pity will not solve the problem,” he said, adding that Europe needs to become more proactive.

Europe’s Next Steps

The German Minister highlighted the need for increased financing at the European level, pointing to a newly established national raw materials fund as a model. He also stressed the importance of accelerating recycling efforts across the EU, describing recycling as a major opportunity to reduce dependency and broaden supply options.

As discussions continue, officials signaled that translating shared concerns into coordinated policy action will be the key test for whether advanced economies can meaningfully reduce their exposure to concentrated mineral supply chains.