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U.S. Seeks to Reduce Dependency on Imported Minerals, Announces New National Security Strategy with Trade Component

Reducing imports is among the primary objectives of a 20 December 2017 executive order by President Trump that seeks to ease U.S. vulnerabilities to the supply of critical minerals. The EO also aims to boost domestic production of these minerals as well as the search for viable alternatives. The EO states that the United States is heavily reliant on imports of certain mineral commodities that are vital to U.S. security and economic prosperity and that this dependency creates a strategic vulnerability to adverse foreign government action, natural disaster and other events that can disrupt supplies. The new strategy is designed to reduce this dependence on imports, support job creation, improve the national security and balance of trade of the United States, and enhance the technological superiority and readiness of the U.S. armed forces, which are among the country’s most significant consumers of critical minerals.

It is not yet clear which minerals will be affected. The EO directs the U.S. Department of the Interior to publish within 60 days a list of critical minerals, which are defined as (i) non-fuel minerals or mineral materials essential to U.S. economic and national security, (ii) the supply chain of which is vulnerable to disruption, and (iii) that serve an essential function in the manufacturing of a product, the absence of which would have significant consequences for the U.S. economy or national security.

The EO establishes a federal policy of reducing the U.S.’ vulnerability to disruptions in the supply of critical minerals by (i) identifying new sources; (ii) increasing activity at all levels of the supply chain, including exploration, mining, concentration, separation, alloying, recycling and reprocessing; (iii) streamlining leasing and permitting processes to expedite these activities; and (iv) ensuring that U.S. miners and producers have electronic access to the most advanced topographic, geologic and geophysical data within U.S. territory.

In addition, the EO requires the submission within 180 days of a report that includes (i) a strategy to reduce U.S. reliance on critical minerals; (ii) an assessment of progress toward developing recycling and reprocessing technologies as well as technological alternatives; (iii) options for accessing and developing critical minerals through investment and trade with U.S. allies and partners; (iv) a plan to improve the topographic, geologic and geophysical mapping of the United States and make the resulting data and metadata electronically accessible; and (v) recommendations to streamline permitting and review processes.

President Trump also recently announced a new national security strategy that seeks to promote U.S. prosperity by, among other things, encouraging free, fair and reciprocal trade relationships. The strategy identifies mainland China and Russia as specific challenges to U.S. interests and accuses them of attempting to erode U.S. security and prosperity. These competitions and rivalries “are not passing trends or momentary problems,” the strategy states, and so require the United States to “rethink the policies of the past two decades,” which were “based on the assumption that engagement with rivals and their inclusion in international institutions and global commerce would turn them into benign actors and trustworthy partners.” However, experience shows that these countries “distorted and undermined” these institutions “without undertaking significant reform of their economies or politics.”

The strategy also blames previous administrations for negotiating “disastrous trade deals” and allowing the growth of unfair trading practices by foreign countries such as dumping, discriminatory non-tariff barriers, forced technology transfers, non-economic capacity, industrial subsidies, and other support from governments and state-owned enterprises to gain economic advantages. In response to these challenges, the strategy sets forth the following priority actions on economic and trade issues.

  • Federal departments and agencies will eliminate unnecessary regulations that stifle growth, drive up costs for U.S. businesses, impede research and development, discourage hiring and incentivise domestic businesses to move overseas.
  • A simpler, fairer and pro-growth tax code will lower business tax rates and establish a territorial system for foreign subsidiary earnings that will improve the competitiveness of U.S. companies and encourage their return to the United States
  • Federal, state and local governments will work together with private industry to improve U.S. airports, seaports and waterways, roads and railways, transit systems and telecommunications. In addition, the U.S. digital infrastructure will be improved by deploying a secure 5G Internet capability nationwide.
  • The United States will pursue bi-lateral trade and investment agreements with countries that commit to fair and reciprocal trade and will modernise existing agreements to ensure they are consistent with those principles. Agreements must adhere to high standards in intellectual property, digital trade, agriculture, labour and the environment.
  • The United States will counter all unfair trade practices that distort markets using all appropriate means, from dialogue to enforcement tools.
  • Using its economic and diplomatic tools the United States will continue to target corrupt foreign officials and work with countries to improve their ability to fight corruption.
  • The United States will work with like-minded partners to preserve and modernise the rules of a fair and reciprocal economic order, emphasising fair trade enforcement actions when necessary as well as multi-national efforts to ensure transparency and adherence to international standards within trade and investment projects.
  • The United States will partner with countries as they build their export markets, promote free market competition and incentivise private sector growth.
  • The United States will reduce the illicit appropriation of its public and private sector technology and technical knowledge by hostile foreign competitors, including by working work with Congress to strengthen the Committee on Foreign Investment in the U.S. to ensure it addresses current and future national security risks.
  • The United States will prioritise counterintelligence and law enforcement activities to curtail intellectual property theft by all sources and will explore new legal and regulatory mechanisms to prevent and prosecute violations.
  • The United States will promote exports of its energy resources, technologies and services and expand its export capacity through the continued support of private sector development of coastal terminals.
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