Highlights

• Von der Leyen's Davos speech signals Europe's pivot toward critical minerals independence, drawing parallels to the 1971 Nixon Shock and warning that dependencies on energy, defense, and raw materials have become strategic liabilities.
• Europe is aggressively diversifying supply chains through trade deals with Mercosur, India, ASEAN, and others—strategic hedging to avoid being caught between U.S. tariffs and Chinese chokepoints in heavy rare earths like dysprosium and terbium.
• While Europe's diagnosis of dependency risk is accurate, execution faces reality checks: regulatory unification remains aspirational, capital markets fragmented, and credible heavy rare earth midstream capacity still absent.

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Does Davos rhetoric meet supply-chain reality?  In her special address (opens in a new tab) at the World Economic Forum, European Commission President Ursula von der Leyen delivered what amounts to Europe’s clearest warning yet that transatlantic economic relations are entering a more contentious phase. Framed as a call for “European independence,” the speech repeatedly returned to a core theme familiar to Rare Earth Exchanges readers: dependencies have become strategic liabilities—whether on energy, capital, defense, or raw materials.

While never namingthe United States as an adversary, von der Leyen’s references to tariffs, “a deal is a deal,” and the need for Europe to stop “playing for time” land unmistakably against the backdrop of U.S. industrial policy, trade restrictions, and subsidy-heavy frameworks such as the previous Inflation Reduction Act and now the initiatives under Trump 2.0.

From Nixon Shock to Critical Minerals Shock

Von der Leyen opened with a historical parallel to the 1971 Nixon Shock, when the U.S. unilaterally severed the dollar from gold—an act that forced Europe to confront monetary dependence. Her argument is explicit: today’s shocks—trade, security, raw materials—require the same structural response.

That logic directly implicates rare earths and critical minerals. Europe’s push forindependence mirrors its growing discomfort with relying onU.S.-aligned or China-dominated supply chains. In Rare Earth Exchanges’ framework, this is especially acute in heavy rare earths, where Myanmar and China still dominate dysprosium, and terbium flows essential to EV motors and defence systems.

Trade expansion as strategic hedging

The speech highlights Europe’s aggressive trade diplomacy: Mercosur, Mexico, Indonesia, Switzerland, Australia, ASEAN states, the UAE, and a looming “mother of all deals” with India. This is not free-trade idealism. It is supply-chain geometry. Europe is deliberately building alternative corridors to avoid being squeezed between U.S. tariffs and Chinese chokepoints.

Notably absent is any comparable enthusiasm for deepening dependence on U.S. industrial frameworks. The message is subtle but firm: Europe will “choose the world,” not a single anchor.

Regulation, capital, energy—closing the internal gaps

Von der Leyen’s proposals for “EU Inc.”, a unified capital market, and an integrated energy union aim to solve Europe’s chronic weakness: fragmentation. For rare earths and critical minerals, this matters. Fragmented permitting, finance, and pricing leave Europe structurally unable to compete with the U.S. or China in upstream and midstream investment.

Her emphasis on defense spending—€800 billion by 2030—and Arctic security further tightens the link between raw materials, national security, and sovereignty. Greenland’s explicit mention underscores Europe’s awareness that critical minerals and geopolitics now overlap in the High North.

What’s solid—and what leans rhetorical

What holds up:

• The diagnosis of dependency risk is accurate.
• Europe’s trade diversification strategy aligns with observable policy moves.
• The linkage between security, energy, defence, and materials is real.

Where the speech stretches:

• Regulatory unification and capital integration remain aspirational. Does Europe have the entrepreneurialspirit?  Lots of evidence suggests not but necessity could compel achange.
• Europe still lacks credible heavy rare earth midstream capacity—no speech can shortcut chemistry.

REEx takeaway

This was not an anti-U.S. speech—but it was a post-dependence speech. For rare earth and critical mineral markets, the signal is clear: Europe is preparing for a world where alignment with Washington is conditional, not automatic. Investors should read this as Europe laying political groundwork for independent sourcing, processing, and defence-linked materials policy—even if execution will lag ambition.

Source: Special Address by President Ursula von der Leyen, World Economic Forum, Davos, Jan. 2026.