• The European Union is advancing a partnership with the United States to diversify critical minerals supply chains away from China, leveraging recent US executive actions and bilateral agreements.
  • This initiative aligns with a temporary suspension of US-China trade tensions, set to expire in November 2026, which has provided a brief reprieve but underscores long-term vulnerabilities.
  • Efforts focus on processed minerals like lithium, cobalt, and gallium, where China controls 40-90% of global processing, driving urgency for Western alternatives amid geopolitical risks.

In a strategic move to bolster supply chain resilience, the European Union is proposing a critical minerals partnership with the United States, according to people familiar with the matter. This development comes as global powers scramble to reduce reliance on China, which dominates the processing of key materials essential for electronics, electric vehicles, and defense technologies. The proposal builds on recent US efforts under President Trump, including an executive order signed on January 15, 2026, that prioritizes international agreements for processed critical minerals and directs the Commerce Secretary to negotiate with allies.

China's control over critical minerals processing—such as 99% of gallium—has long exposed vulnerabilities in Western supply chains. A US-China agreement from October 31, 2025, temporarily suspended China's export controls on most critical minerals until November 2026, averting immediate disruptions. However, this suspension is seen as a "lifeline" rather than a solution, with risks looming if it lapses without viable alternatives in place. The EU's partnership proposal aims to counter this dominance by fostering collaboration with the US, mirroring trends in bilateral deals already in motion, such as a $1 billion framework with Australia and a rare earths refinery project with Saudi Arabia.

President Trump announced personal negotiations on January 14, 2026, eyeing price floors and potential tariffs if talks fail, emphasizing a shift toward "allied cooperation" over unilateral US mining. This approach mimics China's strategy of leveraging alliances to maintain dominance, as noted by analysts. The EU's move fits into broader geopolitical tensions, with suspended export bans from 2025 tariff spats highlighting the fragility of current arrangements. Without a deal, companies could face shortages, forcing them into costly supply audits or market splits based on "friendly" sourcing requirements.

Industry insiders report that efforts to restructure global supply chains have hit a snag due to delays in new Western mining projects, often stalled by risk-averse firms historically selling to Chinese buyers. The EU's Critical Raw Materials Act funds 14 strategic projects to address this, but volumes are unlikely to match China's output soon. In the short term, businesses are urged to map alternatives, with experts predicting volatility from geopolitics if the US-China deal expires without replacement. The partnership could yield commercial volumes if timelines hold, but challenges remain in scaling processing capabilities outside China.

Attempts to reach EU and US officials for comment were unsuccessful, but sources indicate that negotiations are ongoing, with a focus on aligning with G7 standards for non-China markets. The proposal underscores a deepening of transatlantic ties to hedge against China's influence, though it risks alienating partners if unilateralism persists. As manufacturers grapple with the need for non-China gallium for lasers and solar panels, the EU-US initiative represents a critical step toward more resilient supply chains, even as the clock ticks on the 2026 suspension deadline.