Highlights
- Australia serves as a crucial strategic partner for the U.S., offering abundant rare earth reserves and processing capabilities within the Five Eyes alliance.
- The partnership aims to diversify critical mineral supply chains and reduce dependence on China’s rare earth exports.
- The U.S. and Australia are seeking to strengthen their economic and defense collaboration through rare earth mineral development and processing.
Australia’s trade dynamics reveal a pronounced economic alignment with China, its largest trading partner. In 2023, Australia’s exports to China reached a record $219 billion, constituting 32.5% of its total exports. This robust trade relationship is underpinned by the China-Australia Free Trade Agreement (opens in a new tab) (ChAFTA), which has facilitated significant growth in bilateral trade over the past decade. In contrast, Australia’s trade with the United States, while substantial, is comparatively modest, with exports totaling approximately $16.5 billion in 2023 as reported by Export Finance Australia (opens in a new tab) and the University of Technology Sydney (opens in a new tab).
Despite this economic interdependence with China, Australia maintains a strategic alliance with the United States, particularly in the context of rare earth elements (REEs) critical for defense and technology sectors. The alliance goes deeper—a Western bond, a deep Five Eyes link, with joint military and intelligence operations.
U.S. and Australian forces (opens in a new tab) have fought together in every significant conflict since World War I. The Australia, New Zealand, and United States (ANZUS) Security Treaty concluded in 1951, is Australia’s pre-eminent security treaty alliance and enjoys broad bipartisan support.
Recent U.S. tariff policies, which have imposed uniform tariffs on imports from various countries, including allies, have prompted Australia to reaffirm its commitment to trade diversification. As reported in Reuters (opens in a new tab) recently, Deputy Prime Minister Richard Marles emphasized Australia’s intent to reduce reliance on any single trading partner—including China stating, “We are not going to be holding hands with China in respect of any contest that is going on in the world.”
This stance reflects Australia’s nuanced approach to balancing its economic interests with China and its strategic partnership with the U.S., particularly as global supply chains for critical minerals undergo significant realignments.
Five Eyes for Fight
Australia is a cornerstone of Rare Earth Exchanges’ proposed Five Eyes rare earths alliance due to its abundant critical mineral reserves, advanced mining capabilities, and deep defense ties with the United States. The “Five Eyes” intelligence-sharing alliance—comprising the U.S., U.K., Canada, Australia, and New Zealand—originated from WWII-era cooperation and has since evolved into one of the closest military and geopolitical alliances in the world.
These democracies share not only intelligence but deeply integrated defense procurement frameworks, joint industrial bases, and high-trust diplomatic channels. Australia’s strategic value within this bloc is amplified by its Lynas Rare Earths mine—the world’s largest outside of China—and its downstream processing capabilities, which are being bolstered through U.S. Department of Defense funding, including a $120 million contract for heavy rare earths separation.
From America’s perspective, Australia fills a vital geographic and logistical gap in the Indo-Pacific, a region increasingly defined by strategic competition with China. As China tightens its grip on global rare earth exports, the U.S. urgently needs secure alternative supply chains for defense-critical materials like neodymium, dysprosium, and terbium. Australia offers not only proximity to Southeast Asian trade routes but also a politically stable, legally transparent environment for co-developing rare earth extraction, processing, and refining infrastructure.
In turn, Australia benefits from U.S. capital, technology, and defense guarantees, reinforcing its economic and military sovereignty in a volatile regional landscape. This partnership is not just about minerals—it’s about locking in supply chain resilience at the core of allied deterrence strategy.
A Reality Down Under
A Rare Earth Exchanges review reveals a striking trade imbalance: while China accounts for roughly 32% of Australia’s exports, the United States makes up just 4.5%. Despite years of rhetoric about strengthening rare earth supply chains between the U.S. and Australia, actual progress has been minimal. Lynas is still trying to get its U.S. processing facility operational amid reported challenges, and key Australian projects like Arafura remain overlooked—lacking both U.S. offtake agreements and financing, according to our sources.
This is a missed strategic opportunity. Arafura is one of the next Australian rare earth mines likely to enter production and already has a deal to supply Korea’s POSCO, which plans to use its feedstock to build permanent magnets—the critical final step missing in most Western rare earth strategies. So why is America still sitting on the sidelines?
If the U.S. is serious about competing with China and securing critical mineral supply chains, it’s time to move from talk to action. Billions—not millions—are needed now. As part of the historic Five Eyes alliance, Australia has long supported U.S. strategic interests, despite being subjected to tariffs and hosting American military bases. Rare Earth Exchanges, a patriotic Utah-based platform, urges Washington to step up with a $5–$10 billion commitment to launch a meaningful Australia–U.S. Rare Earth Alliance. The window to lead is closing—and China isn’t waiting.
Next, let’s turn our eyes north. If Australia is the linchpin of the Pacific rare earth strategy, then Canada is the sleeping giant of the North American critical minerals game. Mr. Trump, it’s time to hit the reset button on the current trade strategy. Canada isn’t just a friendly neighbor—it’s one of America’s oldest and most trusted allies, and a foundational member of the Five Eyes Critical Mineral Network.
But right now, the approach isn’t delivering results. Trade tensions, misaligned incentives, and bureaucratic friction are slowing collaboration when the stakes couldn’t be higher. The U.S. must show more flexibility, reengage with clarity of purpose, and move forward with Canada as a full partner—not just in rhetoric but in resource development, downstream processing, and technology integration. A true North American rare earth strategy starts with trust and ends with action.
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