Jennifer Hillman, a professor at Georgetown University Law Center, said during a panel discussion last week that Trump’s plan for steep and broadly imposed tariffs would make it harder for the U.S. EV sector to ramp up compared to the rest of the world. That’s because the U.S. has a very limited industry around mining critical minerals and no industry at all for processing them, which makes the nation heavily reliant on other countries like China for raw or processed materials, their byproducts and relevant technical expertise, said Hillman.
While the U.S. is slowly becoming more independent, Hillman noted that building and getting approval for mines or processing projects can take years to more than a decade. She also warned that sweeping tariffs would burden companies producing EV batteries and components if the cost of processed minerals and components rises, and slow the uptake of electric cars, especially if the U.S. also puts higher tariffs on imported vehicles.
“I think it would be very, very difficult to see how the United States continues to grow its own industry in the wake of [steep tariffs on critical minerals],” Hillman said during a webinar hosted by the energy security think tank SAFE. “In other words, I think it would be a major setback in terms of timing.”
Harris, in contrast, appears poised to take a more strategic and surgical approach, but it remains to be seen just how heavily her administration would rely on tariffs, said Hillman.
Balancing act
Kelly Ann Shaw, Trump’s former trade adviser who’s now a partner at Hogan Lovells, said the former president during his first term used tariffs for a variety of reasons — from national security to diversifying supply chains and leverage in negotiations — and it’s likely he would continue that in a second term.
A second Trump administration, she said, would also likely see the former president rely on trade as a crucial policy tool, and possibly work with like-minded countries to create a critical minerals club, or consortium to push out China, enforce labor and environmental standards, and fix the supply chain for minerals or other goods with a national security nexus.
But Shaw suggested Trump’s use of tariffs wouldn’t necessarily undermine economic development.
“I think the Trump team feels very strongly that the entire economic package, which includes tax reform, deregulation, energy diversity, and use of tariffs and trade policies, combined, are going to create a more competitive and investment friendly environment in the United States which will attract a lot of that investment,” said Shaw.
No ‘silver bullet’
Whoever wins the White House will inherit the nation’s need for a coherent trade policy to help shore up a domestic critical minerals sector for EVs, renewables and military equipment, and wean the U.S. off its indirect reliance on China.
U.S. trade policy around raw materials like lithium, cobalt and nickel has been lagging for years along with the nation’s mining sector and processing of raw materials needed for the energy transition, said Hillman with Georgetown. “We basically don’t have a trade policy in critical minerals,” she said.
SAFE released a report last week that took a deep look at the opportunities and limitations around trade measures tied to critical mineral supply chain challenges, and overall called for a holistic approach that includes “robust diplomacy” with allies and partners.
The report also laid out concrete recommendations to hammer out a policy, including bolstering the effectiveness of unilateral actions, creating new trade agreements, working more closely with like-minded nations abroad, and ramping up production of minerals and components domestically and with allied countries. Hillman’s students from Georgetown Law TradeLab Practicum helped conduct analysis that underpinned some of the report.
The report emphasizes that the U.S. faces a significant national security risk because of its heavy reliance on imports of products — like EV battery components and other intermediate goods — that contain minerals sourced from China, and that the U.S. has historically used tariffs to protect domestic industries and counter unfair trade practices, such as those seen in China’s state-subsidized critical mineral sector.
The SAFE study emphasizes that the effectiveness of trade tools that the U.S. has at its disposal — namely tariffs, critical mineral agreements, export controls, and tracing minerals — hinges on how well they’re integrated into broader diplomatic strategies and domestic policies, and that each comes with trade-offs.
Used in isolation, authors of the study warn that using tariffs can have “unintended consequences,” including increasing costs for U.S. manufacturers and consumers, and require “careful calibration” to account for the often lengthy process of qualifying new suppliers or developing alternative sources, especially when options are limited or nonexistent.
Abigail Hunter, executive director of SAFE’s Center for Critical Minerals Strategy, said tariffs can be a powerful tool from a negotiating standpoint, but said they need to be phased in as part of a broader approach that considers the time it takes to build up critical mineral supply chains, from mining to processing.
Authors of the SAFE report called for using trade policies to simultaneously push for diversifying supply chains, building up domestic industries — and state that such a multifaceted outlook will also help address Chinese providers’ practice of oversupplying the market with cheap, poorly regulated materials and dominating global markets.
Shaw said there’s no “silver bullet” to addressing the critical minerals and supply chain challenge, echoing that a holistic approach is needed to address the need for transparency and ensure high environmental, social, and governance standards are followed.
She pointed to the Uyghur Forced Labor Prevention Act as a good example of a law that’s designed to boost transparency, prompt companies to better understand their supply chains and prevent goods made with forced labor from entering the U.S. market.
Shaw also pointed to the creation of a critical minerals club. The White House in recent weeks has also floated the idea of creating a “critical minerals marketplace” with U.S. allies to wrest away control from adversarial nations like China.
Shaw added: “All of these things have to operate together at the same time.”
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