The U.S., EU and Japan are preparing a coordinated critical minerals trade framework that could include price floors and tariffs aimed at countering China’s dominance in key supply chains.

Japan Times with the info.

Summary:

• The U.S., EU and Japan are preparing a framework for a critical minerals trade agreement.

• The proposal may include price floors and tariffs to counter Chinese market influence.

• Talks are being led by the U.S. Trade Representative with negotiations expected to begin in April.

• The push follows Chinese export controls on rare earths and key minerals.

• The deal could include stockpiling, investment coordination and research collaboration.

The United States, Japan and the European Union are moving toward a coordinated strategy to reshape global critical minerals markets, as Western governments seek to reduce reliance on Chinese supply chains.

Officials involved in the discussions say the three partners are preparing to announce plans in the coming weeks to establish the framework for a critical minerals trade agreement, which could include mechanisms such as minimum price floors and tariffs designed to counter what they view as market distortions caused by Chinese export practices.

The initiative is being coordinated by the Office of the U.S. Trade Representative (USTR), which has led discussions with both Brussels and Tokyo. According to people familiar with the preparations, the negotiations aim to develop a structured trade framework covering materials essential to technologies such as electric vehicles, renewable energy systems and advanced electronics.

The push to diversify supply chains intensified after China imposed sweeping export controls on rare earth elements and other critical minerals last year, a move widely viewed as retaliation against new U.S. tariffs introduced by the Trump administration. Beijing has warned it would respond to any effort by Western economies to form a coordinated bloc aimed at restricting or reshaping Chinese exports.

While the most severe shortages seen last year have eased somewhat, many companies across manufacturing, technology and defence sectors say they are still struggling to secure sufficient supplies of key minerals from Chinese producers.

U.S. Trade Representative Jamieson Greer is expected to begin formal negotiations with the EU and Japan in April, shortly after a public consultation period with industry stakeholders concludes on March 19. The announcement of initial plans may coincide with a visit to Washington by Japanese Prime Minister Sanae Takaichi on the same date, according to people familiar with the timing.

One of the central ideas under consideration is the creation of a price floor for certain critical minerals. Such a mechanism would set a minimum price level intended to support producers in allied countries and encourage new investment in mining and processing capacity. By preventing prices from falling below that threshold, policymakers hope to reduce the risk of cheaper Chinese exports undercutting Western producers.

To help design the mechanism, the Defense Advanced Research Projects Agency (DARPA) is reportedly providing technical expertise on pricing models and market structure.

In addition to pricing tools, the proposed framework could include coordinated tariffs, regulatory cooperation, investment screening, research collaboration and strategic stockpiling of minerals.

Mexico has already signed a preliminary action plan with Washington earlier this year, outlining similar discussions on coordinated trade policies and border-adjusted price mechanisms for critical minerals imports. Officials say the arrangements currently being discussed with the EU and Japan are expected to closely resemble that framework.

The initiative could eventually expand to include additional countries and cover a broader range of minerals. Officials are currently assessing which materials should be prioritised first before widening the scope of the agreement.

The issue is also expected to feature prominently at this year’s Group of Seven (G7) summit, where Western governments are increasingly focused on building more resilient supply chains for strategically important resources.