• Trilateral partnership aims to secure supply chains for rare earths and other critical minerals within 30 days
  • Builds on U.S.-Japan framework signed in October 2025 with joint financing commitments
  • Targets China's export restrictions and market dominance through coordinated trade policies and subsidies

A Strategic Response to Supply Chain Vulnerabilities

High-level talks at the 2026 World Economic Forum in Davos have accelerated efforts to establish a trilateral memorandum of understanding between the United States, European Union, and Japan, according to people familiar with the negotiations. The partnership, expected to be signed within 30 days, will strengthen critical minerals supply chains by supporting mining, recycling, processing, and refining projects while exploring coordinated trade policies, price floors, subsidies, and offtake agreements.

This development builds directly on the U.S.-Japan Critical Minerals Framework signed in October 2025 by President Trump and Prime Minister Sanae Takaichi, which commits to joint financing for mining and processing projects within six months, coordinated stockpiling, and investment in recycling and geological mapping. Japan's Industry Minister Ryosei Akazawa reaffirmed cooperation with EU's Stephane Sejourne at Davos, specifically addressing financial support for critical minerals like rare earths amid concerns over China's export restrictions.

"What we're seeing is a convergence of strategic interests," said one European official involved in the discussions who requested anonymity. "Without coordinated action, we remain vulnerable to price shocks and non-market policies." Efforts to reach spokespeople for the U.S. Department of Commerce and Japan's Ministry of Economy, Trade and Industry were unsuccessful by publication time.

Implementation Challenges and Market Implications

The initiative comes as global demand for critical minerals—essential for electric vehicles, defense systems, and renewable energy technologies—continues to boom. China currently supplies approximately 70% of Japan's rare earths, a dependence that has persisted despite diversification efforts following China's 2010 embargo. The U.S.-Japan pact includes asset sale reviews on national security grounds and ties to broader energy cooperation, including small modular reactors and liquefied natural gas exports from Alaska.

Industry experts note that successful implementation will require navigating permitting delays and avoiding duplication with existing efforts like the Minerals Security Partnership and EU's Critical Raw Materials Act. Japan brings particular strengths to the table through its midstream capabilities in separation and magnet production, while the U.S. benefits from Japan's $550 billion investment pledge tied to recent tariff negotiations.

Market participants are watching for the first joint project announcements, expected within 180 days as stipulated in the U.S.-Japan framework. The partnership could eventually expand into a broader plurilateral trade initiative, with discussions already extending to allies like Australia and Canada who have invested billions in their own critical minerals sectors.

Correction: An earlier version of this article stated that a trilateral memorandum had been confirmed. While high-level talks are advancing, the signing timeline remains within 30 days based on current negotiations.