The Trump administration’s ambitious proposal to counter China’s dominance over critical minerals by regulating prices is facing intense pushback from G7 allies, and exposing deep rifts within the Western mining sector.
According to a detailed Reuters analysis by Julia Payne and Ernest Scheyder, diplomatic negotiations for a unified Western trading bloc have begun to stumble over disagreements regarding costs, governance, and rapid timelines.
The concept of a Western trading bloc was first introduced by U.S. Vice President JD Vance in February 2026. The initiative aims to break the West’s dependence on Beijing, which has heavily suppressed global market prices for foundational tech and defense components, such as cobalt, lithium, and nickel, by operating its mines at a loss.
As Reuters notes, this artificial pricing has pushed many Western mining competitors out of business. To combat this, the White House has proposed a series of price floors, subsidies, and adjustable tariffs.
However, U.S. Trade Representative Jamieson Greer is facing significant friction in private talks ahead of this week’s G7 meeting in Évian-les-Bains, France. European allies are particularly resistant to Washington’s plan to set metal prices using an artificial intelligence model developed by the Pentagon’s Defense Advanced Research Projects Agency (DARPA).
Known as the OPEN program, the AI calculates what a metal should cost based on legitimate labor and production inputs while filtering out Chinese market manipulation. European officials, such as Nicola Beer of the European Investment Bank, argue that using a U.S. military AI system grants Washington too much control. They prefer transparent, market-driven European indexes and more flexible governance structures.
Geopolitical strategy has also created a rift. While Canada and France favor a broad, multilateral G7 approach managed through a permanent secretariat like the IEA, the United States prefers striking fast, binding bilateral deals that can later be expanded.
Washington plans to present bilateral proposals to Japan and the European Union by the end of June, focusing on five to ten critical materials currently subject to Chinese export restrictions, including graphite and rare earths.
Meanwhile, the domestic U.S. mining industry is heavily divided. A Reuters review of over 230 public submissions to Greer’s office revealed that while companies agree the focus should remain on niche minerals, they strongly disagree on the execution.
Companies like MP Materials have benefited from government price backstops, but major trade organizations like the National Mining Association are advising against heavy-handed price-fixing. They argue that tax credits and incentive-based approaches are far better suited for the domestic market. With both international allies and corporate leaders nervous about market disruptions, the future of the West’s critical mineral supply chain remains highly uncertain.
