Highlights
- The Trump administration is initiating national security investigations under Section 232.
- Targeted imports include semiconductors, pharmaceuticals, and critical minerals.
- Executive Order 14272 accelerates critical minerals investigation.
- There are concerns about dependency on Chinese mineral supply chains.
- Tariffs may create price advantages for domestic and allied sources.
- Potential risk of disrupting global value chains without a comprehensive industrial policy.
The Trump administration has initiated sweeping national security investigations under Section 232 of the Trade Expansion Act, targeting imports of semiconductors, pharmaceutical products, and—for the first time—processed critical minerals. These probes are almost certain to result in new tariffs, reinforcing a strategy that is increasingly reshaping global supply chains and setting the stage for a direct confrontation with China’s minerals dominance.
The recent analysis came via attorneys at Orrick (opens in a new tab), led by Harry Clark, Partner, International Trade and Investment, Mergers & Acquisitions (opens in a new tab)
The new actions follow President Trump’s Executive Order 14272, which accelerates the investigation into critical minerals to a 180-day timeframe—half the usual duration. The scope is broad, encompassing not only refined rare earths and battery metals but also any semi-finished or finished product derived from them, such as permanent magnets, microprocessors, and electric vehicle components. In effect, the White House is signaling it sees dependency on Chinese critical minerals as a direct national security vulnerability, not just a commercial imbalance. Of course, this is nothing new; critics have been calling out this dependence for well over a decade.
For Australia, Canada, and other U.S. allies seeking to establish independent rare earth supply chains, the implications are profound. Tariffs may create new price advantages for domestic and allied sources, but they also risk disrupting complex global value chains. The U.S. currently lacks commercial-scale facilities for the separation of heavy rare earths, and attempts to decouple from Chinese processing could lead to material shortages unless alternative infrastructure is quickly scaled.
Rare Earth Exchanges cautions stakeholders in this process. While the rationale for de-risking supply chains is credible, especially after China’s recent export restrictions, tariffs alone cannot substitute for coherent industrial policy. Section 232 actions must be paired with expedited permitting, investment in domestic refining tech, and cross-border cooperation. As an example, President Trump’s moves to punish the likes of Canada are a mistake, as traditional Five Eyes alliances are more important than ever.
Without that, tariffs risk becoming blunt-force instruments that raise costs and exacerbate supply fragility rather than strengthening national security.
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