China derisking and decoupling is the sole reason for the focus on finding new critical minerals partners today.
“I recently visited a germanium facility in Quapaw, Oklahoma, a very rural part of my state of Oklahoma. That facility is one of only three in the United States,” said Rep. Kevin Hern (R-OK-1) about the European multinational, Umicore; a company that dates back to the days of Napoleon Bonaparte, drilling for copper in the Congo in the 1900s.
“That facility uses a high-efficiency recycling process which allows it to vastly decrease the input materials needed to refine germanium. But even with that technology, they still will not be able to compete if or when China floods the market again with subsidized germanium,” Hern said.
China has turned the export valve of germanium on and off for the last several years. The total export ban enacted in December 2024 has been paused until November 27, though Beijing can still withhold some companies’ exports if it wants to.
“Securing our critical mineral supply chain is not about isolating America from global markets,” Hern said. “It is about ensuring that no adversary has the ability to shut down critical American industries or threaten our national security.”
Critical minerals has been the main reason cited for the Trump administration “going easy” on China over the last year. This has included relenting on some export controls of high value chips used in quantum computing for high speed AI platforms.
“I’m not sure this would be happening if we weren’t so reliant on critical minerals from China,” said Rep. Darin LaHood (R-IL-16) about Nvidia chips exports to China. “There seems to be a quid pro quo here, and that concerns me and a lot of other people here.”
Next month, the Central Asia 5-plus-1 ministerial meeting is supposed to take place in Samarkand, an ancient city in Uzbekistan along the old Silk Road. One witness, Bill Clinton-appointed former Ambassador to Uzbekistan, John Herbst, now Senior Director for the Atlantic Council’s Eurasia Center, recommended Congress repeal Jackson-Vanik before that meeting. “There is interest in Congress to repeal it. Secretary of State (Marco) Rubio has endorsed it,” he said. [Testimony]
The C5+1 is an attempt by Washington to gain influence over Russia and China in the Central Asian states.
Rep. Ron Estes (R-KS-4) provided a good summary for the hearing. It should be considered by CPA members as the consensus view of House Ways & Means.
“Strategic partnerships between the U.S. and Central Asia and Africa are opportunities to develop capacity without dependencies on a single country,” he said. “Working with partners in these regions will help us build resilience.”
House Ways & Means Committee Hearing Suggests Critical Minerals Partners Should Get Special Tariff Treatment
A Sept. 2 House Ways & Means Committee hearing on critical minerals had both members and witnesses suggesting that countries the U.S. relies on for these hard-to-mine, harder-to-process minerals be granted trade preferences. That included the possibility of extending the African Growth and Opportunities Act (AGOA) for at least 10 years, granting Kazakhstan permanent normal trade relations, and eliminating the downstream Section 232 metals tariffs to import finished product from Africa. The latter would be highly unpopular with domestic metals producers.
For background, AGOA was extended by Congress for two years on Sept. 1, and signed into law by the President the next day, having been part of another Continuing Resolution (H.R. 6500) to fund the government for the rest of the year. Two Committee members, including Chairman Jason Smith (R-MO-8) admitted to being cautious about granting special tariff treatment to Central Asian nations like Kazakhstan and Uzbekistan, but both countries really won out in the favorability rankings, all told.
Chairman Smith – who was in Kazakhstan in late August – only eluded to China benefiting from giving Kazakhstan PNTR status, something Rep. Jimmy Pannetta (D-CA-19) has legislation for, just waiting to be considered.
Committee member Rep. Lloyd Doggett (D-TX-37) said he was skeptical about exempting mineral-rich Central Asian nations from the old Cold War era Jackson Vanik Act. This law restricted trade, and raised tariffs, on human rights grounds during the days of the Soviet Union. Kazakhstan and Uzbekistan face no trade restrictions anymore, despite being subject to that Act. Lifting it permanently might pave the way to PNTR for countries subject to that law, such as Azerbaijan and Tajikistan. “Those human rights concerns there are not as bad as they once were but they are still very real,” he said. “True, Uzbekistan’s leaders no longer boil their opponents alive as they once did, but the human rights situation in both countries remains severe.”
Africa was given equal time in the hearing, with most members and witnesses willing to give African countries the most benefits. Much of this may be due to the fact that China signed a duty free agreement with 53 out of 54 countries on the continent in May. (Only tiny Eswatini has been shut out due to its diplomatic relations with Taiwan.)
Gracelin Baskaran, Director of the Critical Minerals Security Program at CSIS [Testimony], was the one witness that wanted to see more African metals production in U.S. supply chains. To get there, the downstream Section 232 tariffs on copper, aluminum and steel would have to be lowered.
“Tariff policy should reward partners for moving up the value chain, not punish them,” she said.
Baskaran was the only one pushing this line, but some members of congress seemed to entertain the idea. She also spoke about infrastructure investment in Africa.
The United States has begun to respond to Africa’s request for capital, something the Chinese have done for years. The so-called Lobito Corridor – a major economic route connecting the port of Lobito in Angola to the Katanga province in the DRC and the “copperbelt” in Zambia – drew the attention of the U.S. International Development Finance Corporation last year. The U.S. government lender agreed last December to fund a railroad project with Portuguese miner and energy infrastructure giant Mota-Engil.
But as strange as this may sound, Mota-Engil is primarily owned by the founding Mota family and Chinese state-owned enterprise China Communications Construction Company, which owns 32%. So the DFC is lending money to a Portuguese-Chinese conglomerate to build a railroad to sell processed cobalt and other metals to the U.S. and European Union out of Africa. Prior to Trump’s first term as president, such an arrangement would look like the normal relations of globalization. Since then, it serves as a testament to how enmeshed China is in African strategic commodities, and the entire critical minerals infrastructure, more broadly.
Concern over China’s control of this market drives much of the Committee’s concerns. There is bipartisan support for action, though the China lens could easily cloud judgement. It could lead to quick fixes with other countries that are barely U.S. allies rather than help for homeland players.
Members Open to More Government Involvement
Rep. David Schweikert (R-AZ-1) suggests tax benefits and government support is needed for U.S. based refiners.
“We need to work on a policy that says, OK, you’re going to do this here, then here’s a tax policy for the extraction of material,” he said. “But you’ve got to go much further than just extraction because it’s not enough to have the raw input if we also haven’t moved to how I make the byproducts that I actually need,” Schweikert said. “We should be fixated on the ability to produce the final product, let alone just the raw material.”
After the Supreme Court ruling against the IEEPA tariffs, Schweikert, as Joint Economic Committee chairman, said he preferred a border-adjusted, destination-based cash-flow tax like a VAT, suggesting he is lukewarm at best on the Section 232s despite being in a state that benefits from them. “Tariffs distort markets and reduce overall output,” he wrote at the time.
Rep. Randy Feenstra (R-IA-4) wants more government action. He had one very interesting take: “I look at our current trade initiatives and American processing, like downstream manufacturing. I mean this is what we’ve got to get engaged in. It’s got to be a private-public partnership,” he said.
Feenstra’s putting private-public partnerships out there suggests he might be open to the idea of government investment in smelters or mills, similar to U.S. investment in strategic companies like Intel. No one else touched on this subject in the hearing.
Other than Panetta’s bill to bring Kazakhstan into PNTR, Rep. Blake Moore (R-UT-1) mentioned his new bill, the Critical Mineral and Extraction Tax Parity Act (H.R. 8780), introduced in May. That bill applies the 45X tax credit to critical minerals extraction.
China as Critical Minerals Policy Driver
China derisking and decoupling is the sole reason for the focus on finding new critical minerals partners today.
“I recently visited a germanium facility in Quapaw, Oklahoma, a very rural part of my state of Oklahoma. That facility is one of only three in the United States,” said Rep. Kevin Hern (R-OK-1) about the European multinational, Umicore; a company that dates back to the days of Napoleon Bonaparte, drilling for copper in the Congo in the 1900s.
“That facility uses a high-efficiency recycling process which allows it to vastly decrease the input materials needed to refine germanium. But even with that technology, they still will not be able to compete if or when China floods the market again with subsidized germanium,” Hern said.
China has turned the export valve of germanium on and off for the last several years. The total export ban enacted in December 2024 has been paused until November 27, though Beijing can still withhold some companies’ exports if it wants to.
“Securing our critical mineral supply chain is not about isolating America from global markets,” Hern said. “It is about ensuring that no adversary has the ability to shut down critical American industries or threaten our national security.”
Critical minerals has been the main reason cited for the Trump administration “going easy” on China over the last year. This has included relenting on some export controls of high value chips used in quantum computing for high speed AI platforms.
“I’m not sure this would be happening if we weren’t so reliant on critical minerals from China,” said Rep. Darin LaHood (R-IL-16) about Nvidia chips exports to China. “There seems to be a quid pro quo here, and that concerns me and a lot of other people here.”
Next month, the Central Asia 5-plus-1 ministerial meeting is supposed to take place in Samarkand, an ancient city in Uzbekistan along the old Silk Road. One witness, Bill Clinton-appointed former Ambassador to Uzbekistan, John Herbst, now Senior Director for the Atlantic Council’s Eurasia Center, recommended Congress repeal Jackson-Vanik before that meeting. “There is interest in Congress to repeal it. Secretary of State (Marco) Rubio has endorsed it,” he said. [Testimony]
The C5+1 is an attempt by Washington to gain influence over Russia and China in the Central Asian states.
Rep. Ron Estes (R-KS-4) provided a good summary for the hearing. It should be considered by CPA members as the consensus view of House Ways & Means.
“Strategic partnerships between the U.S. and Central Asia and Africa are opportunities to develop capacity without dependencies on a single country,” he said. “Working with partners in these regions will help us build resilience.”
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