The US House of Representatives’ Committee on China is set to announce the establishment of a bipartisan working group on Tuesday (June 18) to address concerns regarding America’s reliance on China in crucial mineral supply chains.
Committee Chair, Republican Representative John Moolenaar and top Democratic Representative Raja Krishnamoorthi stated that the new task force will help formulate policies to address America’s dependency on China in key minerals used in sectors such as semiconductors, wind turbines, and electric vehicles.
In a statement to Reuters, the committee said that the working group “will strive to increase transparency in America’s reliance on critical mineral supply chains and develop a comprehensive set of investment, regulatory reforms, and tax incentives to reduce this dependency.”
Amid trade disputes with the US and the European Union, Beijing is increasingly showing intentions to restrict exports of resources in critical mineral supply chains. For example, in July 2023, Beijing imposed restrictions on the exports of two minerals used in semiconductors, solar panels, and missile systems as a leverage point due to China’s dominant position in global mineral resources.
However, such restrictive actions by the Chinese Communist Party often end up hurting related industries in China, causing disruptions in domestic and international production activities.
Approximately two-thirds of the world’s lithium and cobalt are processed in China, both of which are vital raw materials for producing electric vehicles. Additionally, nearly 60% of global aluminum and 80% of polysilicon originate from China; aluminum is also used in electric vehicle batteries, and polysilicon is a material used in manufacturing solar panels.
According to data from the International Energy Agency, China accounts for 90% of global rare earth refining.
The Biden administration has made reducing America’s reliance on Chinese minerals a priority, including through the “Lowering Inflation Act.” Enacted in 2022, this law provides subsidies for electric vehicle batteries made from minerals mined and refined in the US and its friendly nations, aiming to establish supply chains bypassing China.
Another legislation, the “Infrastructure Investment and Jobs Act,” passed in 2021, allocates millions of dollars to promote the extraction of critical minerals and authorizes the federal government to provide loans for projects aimed at increasing domestic resource supplies.