> One area of discussion will be calls for the US to guarantee a minimum price for critical minerals and rare earths
Why is a minimum price more important that a maximum one with guaranteed supply quotas?
And who trusts the US for that?
> “This is about trust. You sign a deal and you trust it will apply,” said an EU source. “This constant threat of more tariffs, whether 10% because of Greenland or 200% on champagne because they don’t sign up to the ‘board of peace’ has to stop.”
Yea. I guess its just theater to calm trump and to guarantee profit margins.
> Why is a minimum price more important that a maximum one with guaranteed supply quotas?
Previous attempts to set up a supply chain for these minerals in the West have repeatedly failed because the economics didn't work out. If China can sell a batch of samarium at a lower cost than what a Western firm would spend to extract it, you simply can't run the business without a minimum price or equivalent ongoing subsidy.
> And who trusts the US for that?
The US is the largest consumer and could be a major supplier of these minerals. Their position on this issue is relevant regardless of trust.
> you simply can't run the business without a minimum price or equivalent ongoing subsidy.
This is the question - what form of subsidy to use? You seem to imply they're all the same but that isn't true. For example, farming is subsidized in the US without mandating minimum prices - there seem to be good reasons for that but why are minerals so much different as to warrant a different approach which is significantly more disruptive to competition and thus to market forces?
> The US is the largest consumer and could be a major supplier of these minerals. Their position on this issue is relevant regardless of trust.
That statement is irrelevant to the quote it replied to. The issue was trust regarding agreement-breaking tariff and other trade policies which turn any agreement into a one-sided tool for achieving market domination - that is, when one side conforms to agreements and the other doesn't, that other side is effectively dictating its conditions to the rest. This should be quite obvious but what do I know.
Farming in the US is indeed subsidized with minimum prices. Because the government isn't itself in the value chain of most farm goods, there's a two-level payment structure; rather than telling the buyer they must pay at least $X, the government steps in to pay the difference between the market price and the minimum (https://www.fsa.usda.gov/resources/programs/arc-plc). But the products made from critical minerals are almost all destined for government purchase, so there's no point in complicating things.
> That statement is irrelevant to the quote it replied to.
I don't think that's true, unless the quote was meant as a snippy aside that's irrelevant to the source article. If the US wants to talk about critical minerals, you can (probably should!) be skeptical of any promises or commitments the current administration makes, but refusing to talk isn't a realistic option.
They're talking to China too, to be clear. The EU hosted talks in October. However, the Chinese position on the matter is pretty clear: they're happy to export these minerals for civilian applications, but they don't want to supply foreign militaries, and they're going to enact whatever restrictions are necessary to ensure that stops happening.
> They're talking to China too, to be clear. The EU hosted talks in October. However, the Chinese position on the matter is pretty clear: they're happy to export these minerals for civilian applications, but they don't want to supply foreign militaries, and they're going to enact whatever restrictions are necessary to ensure that stops happening.
This is also why the EU signed a Defense Pact with India [0] and Vietnam [1] last week - critical mineral sourcing from India and Vietnam leveraging Japanese [2] and Korean [3] technology partnerships in both countries drove both deals. Additonally, both Indian and Vietnamese component and defense vendors are now elligible to participate in Rearm Europe/Readiness 2030 along with their Japanese and Korean partners like Mitsubishi, Kawasaki, Hyundai, and Samsung.
Most countries are adopting a Production Linked Incentive model for REEs which Vietnam [1] and India [0] are using to build our capacity, as both face active military disputes against China, and have been supported by Japanese [2] and Korean [3] processing tech transfers and JVs.
Western countries like Australia and the US are adopting similar strategies, which is the point of the summit mentioned.
> The issue was trust regarding agreement-breaking tariff and other trade policies which turn any agreement into a one-sided tool for achieving market domination
The issue is China has already [4] done [5] this [6] for over a decade [7].
As such, most countries (especially Asian countries where the majority of the electronic supply chain exist) are fine working with the US because China is an existential threat that wishes to invade them.
The EU used to be on the fence but Chinese leadership's constant undermining [8] of the EU [9] as an institution [10] led the EU to get on board as well.
Why is a minimum price more important that a maximum one with guaranteed supply quotas?
And who trusts the US for that?
> “This is about trust. You sign a deal and you trust it will apply,” said an EU source. “This constant threat of more tariffs, whether 10% because of Greenland or 200% on champagne because they don’t sign up to the ‘board of peace’ has to stop.”
Yea. I guess its just theater to calm trump and to guarantee profit margins.