The European Union and United States are close to finalising an agreement to jointly produce and secure critical minerals, aiming to reduce reliance on Chinese supply chains by creating new partnerships and harmonising standards.
The proposed deal would introduce policy mechanisms—including minimum prices, which set a baseline cost for minerals to ensure suppliers receive a guaranteed amount and are less exposed to market volatility. It may also include purchase guarantees, where governments commit to buying a certain volume of minerals, and public procurement, meaning government agencies would buy minerals directly to support and stabilise the supply chain. According to a draft “action plan” seen by Bloomberg, the EU and US plan to collaborate on standards, investments, and joint projects , as well as coordinate responses to supply disruptions caused by countries such as China.
Additionally, the EU and US are seeking to bring other like-minded partners into a multi-country accord to help establish new critical mineral supply chains, which underpin nearly all modern technology , including missile guidance systems and fighter jets, as well as electric vehicles.
The urgency behind these efforts is underscored by Beijing’s sweeping export controls last year, including restrictions on rare earths, which followed tariffs imposed by US President Donald Trump . These policy moves disrupted global supply chains and forced companies in Europe to halt production.
Representatives from the US Trade Representative and the European Commission have not commented on the ongoing negotiations.
If finalised, the minerals accord would mark a rare moment of alignment in the often strained EU-US relationship, which has recently faced challenges over defence cooperation and delayed trade agreements.
Both the EU and US are prioritising efforts to reduce reliance on Chinese supply chains for critical minerals by fostering new partnerships and setting joint standards.
The US and its closest trading partners have discussed developing a rare earth and critical minerals industry insulated from low-cost Chinese competition, noting that China currently processes over 80% of the world’s rare earths.
While there is not yet agreement on specific policies such as price floors for each mineral, subsidies, and purchase guarantees, the EU-US plan reflects a commitment to working through complex details, with similar arrangements already in place with Mexico.
The EU-US initiative echoes statements released by the EU, US, and Japan in February, and Bloomberg recently reported that these nations are planning to establish a critical minerals trade agreement.
Under a non-binding memorandum of understanding, the EU-US partnership would cover critical minerals throughout the entire value chain—including exploration, extraction, processing, exploration , refining, recycling, and recovery—ensuring a comprehensive approach to supply chain management.
The partnership may also involve joint public procurement—where governments collectively purchase minerals to support the industry—and cooperation on export restrictions, stockpiling, and resource mapping, according to the draft memorandum.
These documents are currently under review by EU member states, and details could change as deliberations continue.