China’s manipulation of critical mineral markets is part of a broader geopolitical strategy to challenge U.S. economic and military leadership. By artificially lowering input costs, Beijing reduces production expenses for Chinese manufacturers, boosting the competitiveness of their products on a global scale. These depressed prices are not the result of healthy market forces but deliberate structural distortions that make it nearly impossible for profit-driven firms outside China to operate without intervention.
The U.S. government recognizes the urgency of addressing these distortions. While pricing tools—such as contracts for differences, price insurance, forward contracts, and tariffs —can provide short-term relief, they treat symptoms rather than root causes.
While policymakers must consider solutions that resolve the root cause, in the short-term, targeted and project-specific pricing intervention may be considered when market conditions prevent otherwise viable projects from reaching commercial operation.
Simultaneously to confronting price challenges, the United States must coordinate with other trading partners to achieve comparable scale in production capacity and demand volumes, while also maintaining robust industrial and manufacturing capabilities at home.
To learn more, read our full issue brief on critical minerals pricing mechanisms.
