Building an Allied Stockpile for Critical Minerals

- China's dominance in critical minerals is a potent geopolitical weapon. In April, the Trump administration boldly launched a new trade war, but Beijing has already turned the tables within weeks. US factories, including a Ford plant, temporarily shut down because China had cut the supply of critical inputs. Since then, America has been desperate for a deal. We must break this dependency, but that's easier said than done. non-Chinese companies investing in alternative supplies of critical minerals live under constant uncertainty. At any moment, China might cut off supply and send prices soaring, or it could glut the market to crash prices and drive foreign producers out of business. As long as this uncertainty persists, private companies will never build the alternative supply. To break our dependence on China, the United States needs a strategic stockpile, a buffer system that breaks China's ability to weaponize prices. Stockpiles need to be designed carefully or they risk distorting the market. In the Cold War, for example, the federal helium stockpile grew out of control and racked up billions in debt. When Congress voted to sell off the helium, there was too much supply and the price crashed. American helium producers were driven out of business, and later when the nation needed helium again, it faced a crippling shortage. We need to learn from this history and we need to coordinate with allies. It makes no sense to spend billions on duplicate stockpiles that compete against each other. That's why we propose a new US led multilateral commercial stockpile or MCS. The MCS would be a public private corporation overseen by a board of allied governments, but run day to day by regulated private operators. Here's how it works. First, the MCS stockpiles a year's worth of demand for the most critical minerals. If and when China floods the market to crash the price it can buy extra. Then if China cuts off supply, companies in allied countries can buy from the stockpile what they need. Allied governments would pay to set the MCS up. Companies that need critical minerals would pay to keep it running with annual subscription fees like insurance. Just last month, president Trump signed a joint statement with Japan promising to coordinate on stockpiling. This is encouraging, but the United States must act faster and coordinate not just with Japan, but with all our allies.