Trump Sets Demands Before His Allies

Donald Trump's administration is urging allied countries to stop purchasing critical minerals from China, opting instead for more expensive but safer suppliers. According to the Financial Times, U.S. Trade Representative Jamison Greer clarified to partners that in order to create protected supply chains and reduce dependence on Chinese raw materials, it is necessary to pay a "national security premium."

Washington is promoting the formation of a framework of countries, including European nations, that will trade minerals at set minimum prices. With this move, the U.S. aims to protect investments made in extraction and processing sectors while preventing China from artificially lowering prices.

It is noted that to achieve this goal, the United States may impose high tariffs or other restrictions on competing producers. “When trading partners express concerns about the economic costs of price thresholds or similar mechanisms, I simply say, what you are talking about, namely cost-effectiveness, is exactly the reason we are in the current situation,” Greer said to the newspaper.

“There is a price that we are paying, and I call it the national security premium, and we will all have to pay that national security premium to have a secure supply chain,” FT quoted him as saying.

The publication adds that this initiative has raised concerns among some U.S. allies. In closed negotiations, they warned that the new mechanism could increase costs in the automotive, defense, and clean energy sectors, as well as lead to retaliatory trade actions from China.