Trump Administration In Talks To Set Up $5 Billion Critical Minerals Fund As China’s Rare Earths Dominance Remains A Concern: Report

The Trump administration is reportedly in talks with a New York-based investment firm to set up a $5 billion fund to boost mining of critical minerals.

According to a Bloomberg report citing people familiar with the matter, the U.S. International Development Finance Corp. is exploring a joint venture with Orion Resource Partners.

This comes after China used its dominance in the rare earth minerals industry as a bargaining chip to bring the U.S. to the negotiating table on semiconductor chip restrictions. 

The report added that the U.S financing agency and Orion Resources are still negotiating the key terms of the partnership, and it’s not certain yet that a deal will be reached. It said an agency official confirmed that it is indeed seeking to collaborate with the private sector as well as the governments of potential critical minerals exporting countries.

This comes after shipments of rare earth minerals to the U.S. from China hit rock bottom in May after President Donald Trump escalated the trade war with his “Liberation Day” tariffs. China dominates the rare earth magnet supply by processing around 90% of all materials.

However, after trade talks in Geneva and London, both the U.S. and China de-escalated the tariff war, and rare earth exports from the latter to the United States surged 76% in July compared to June.

Meanwhile, U.S. equities declined in Tuesday’s opening trade. At the time of writing, the SPDR S&P 500 ETF (SPY), which tracks the S&P 500 index, was down 0.1%, while the Invesco QQQ Trust (QQQ) edged lower by 0.03%. Retail sentiment around the S&P 500 ETF on Stocktwits was in the ‘bullish’ territory.

Also See: Bessent Says Trump’s Willingness To Shut Down TikTok In US Pushed China To Make A Deal: Report

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