Highlights
- A University of Chicago thesis demonstrates the EU's tendency to free-ride on U.S. investments in critical mineral infrastructure.
- The study uses a Markov Decision Process model to simulate EU strategy in developing alternative supply chains against China's mineral dominance.
- Without enforceable frameworks, the U.S. risks overextending its leadership while allies benefit without matching investment.
A groundbreaking thesis by Divya Rajesh (opens in a new tab), published by the University of Chicagoโs Committee on International Relations under the guidance of Nobel Laureate Dr. Roger Myerson, (opens in a new tab) reveals that the European Union is likely to free-ride on U.S. investments in critical mineral infrastructure unless the United States imposes credible economic penalties. The study uses a Markov Decision Process model (opens in a new tab) to simulate EU strategy in response to U.S. leadership in building alternative supply chains to counter Chinaโs rare earth and critical mineral dominance.
Building Models with a Warning
Key findings indicate that under most geopolitical and economic conditions, the EU is unlikely to commit significant capital to developing its own supply chain infrastructure, instead choosing to rely on U.S. and allied investments while securing access through trade. Only when the U.S. credibly threatens economic penalties does the model show a shift toward meaningful EU participation. The research also identifies structural barriersโincluding long mine development timelines, rising populism, and budget constraintsโthat make EU commitment politically and economically difficult.
Rajeshโs thesis presents a sharp critique of the Minerals Security Partnership and current โfriend-shoringโ strategies, arguing that they lack enforceable mechanisms to ensure equitable burden sharing. While the study emphasizes security imperativesโmilitary, energy, and economicโit also acknowledges limitations: it models the EU as a unified actor. It simplifies the diversity of mineral priorities between the U.S. and the EU. External grants did not fund the paper and represent an independent academic contribution to a growing body of critical minerals policy research.
This analysis is a wake-up call. Without enforceable frameworks, the U.S. risks overextending its leadership in global critical mineral supply chains, while allies extract benefits without matching investment. As China tightens its grip on rare earth exports, Rajeshโs study underscores the strategic necessity of transforming friendship into a mutually enforceable economic alignment.
So, what does America want? They complained that everybody else was doing the manufacturing and supply, imposing punitive Tariffs to force companies into moving Industry back to the US. They will then expect the rest of the World to consume its overpriced products. What next, is this Author suggesting that Europe fund America’s development?