Key Takeaways:
KSG assesses that Trump will likely boost domestic critical minerals mining through permitting reform, financial support for mining, defense procurement, and tariffs as key policy levers. In contrast, the outlook for clean energy incentives and international collaboration on critical minerals policies appears less favorable under a second Trump administration.
President Biden has driven significant growth in downstream sectors, such as battery manufacturing, but the mining and processing of critical minerals have not kept pace, continuing U.S. reliance on imports. Addressing this imbalance will likely require a shift in approach under a Trump administration.
Trump will likely boost U.S. mining and processing, but reversing decades of underdevelopment will be slow, leaving China’s dominance over critical mineral supply chains largely intact throughout the remainder of this decade.
Tariffs on Chinese imports of critical minerals will likely spur U.S. mining but increase costs for industries like defense and electric vehicles (EVs), with potential Chinese retaliatory restrictions of critical mineral exports disrupting critical supply chains.
U.S. Critical Minerals Policy to Date:
Trump will inherit several acts, partnerships and memoranda of understanding introduced by the Biden Administration on U.S. critical minerals policy, including:
Infrastructure Investment and Jobs Act (IIJA) (2021): Allocated $1.2 trillion to infrastructure, driving demand for critical minerals. Highlights included $7.5 billion for EV chargers, $73 billion for power grid modernization, and $65 billion for broadband expansion, increasing demand for minerals like copper.
Inflation Reduction Act (IRA) (2022): Offered $7,500 EV tax credits linked to battery minerals sourced from the U.S. or allied countries, $500 million in incentives for critical mineral mining and processing, $40 billion in loan guarantees available for critical minerals projects, and support for solar, wind, and energy storage technologies reliant on materials such as lithium, nickel, and rare-earth elements (REE).
Prohibiting Russian Uranium Imports Act (2024): Prohibits uranium imports from Russia with a waiver for nuclear power plant (NPP) operators extending until 2028.
ADVANCE Act (2024): Supports the development of advanced nuclear reactors and domestic nuclear fuel supply chains. The Department of Energy also allocated $2.7 billion in March 2024 for domestic uranium enrichment projects.
Minerals Security Partnership (MSP) (2022): Unites the U.S., the EU, and 21 other countries to promote sustainable critical mineral supply chains, with key projects in Angola, Australia, Canada, the U.S., and Tanzania.
Bilateral agreements included a 2023 Critical Minerals Agreement (CMA) with Japan to collaborate on supply chains for cobalt, graphite, lithium, manganese, and nickel; a 2022 Memorandum of Understanding (MOU) with the Democratic Republic of Congo and Zambia to develop an EV supply chain leveraging their copper and cobalt resources; and a 2024 MOU with India focused on strengthening critical minerals supply chains.
Despite these measures, U.S. mining and processing lag behind demand, with long permitting times and regulatory hurdles deepening reliance on imports. Over 50% of U.S annual consumption of 31 out of 35 minerals deemed as critical by the Department of Interior come from abroad, primarily China. The Biden administration's focus on environmental protection and indigenous rights further constrained domestic supply growth, including a moratorium on copper mining in Minnesota's Boundary Waters and a ban on mineral exploration in Colorado's Thompson Divide.
Changes Under Trump
Trump thus inherits significant challenges in boosting domestic mining and supply growth, but has access to key tools such as permitting reform, mining incentives, defense procurement, tariffs, and targeted international collaboration to reduce U.S. reliance on China.
KSG assesses that Trump is likely to adopt an expansionist approach to U.S. mining, marking a departure from the more cautious policies of the Biden administration. However, achieving substantial reductions in U.S. dependence on China-dominated supply chains is unlikely within a single presidential term and will require sustained and coordinated efforts extending well into the next decade.
U.S. Net Import Reliance on Critical Minerals (2023)
Production Share of Critical Minerals by Leading Producer (2023)
Forward Look:
Financial Support
KSG assesses that a Trump administration is likely to extend financial support, including tax incentives, grants, and loans, to boost U.S. critical mineral mining. Bipartisan efforts to reduce reliance on China for critical minerals, combined with traditional Republican support for extractive industries, will likely drive these initiatives.
U.S. mineral producers will likely require increased public financial support to enhance output, particularly given low prices for key energy transition metals like cobalt, lithium, and nickel. For instance, Talon Metals’ Tamarack nickel project in Minnesota faces significant market uncertainties, while the scheduled closure of Lundin Mining’s Eagle Mine in Michigan by 2029 threatens to leave the U.S. without domestic nickel production. REE mining operations, such as California’s Mountain Pass facility—the only active REE mine and processing plant in the U.S.—are also likely to need substantial government support to stay competitive.
Uranium
KSG assesses that Trump, who has expressed pro-nuclear views during his campaign, is likely to back financial initiatives aimed at bolstering U.S. uranium mining and enrichment capabilities, including the ADVANCE Act. This aligns with the critical role nuclear energy could play in powering data centers, which are essential for maintaining U.S. leadership over China in artificial intelligence development—a priority Trump has also emphasized. Currently, the U.S. operates only one uranium enrichment plant, leaving it heavily reliant on imports of enriched uranium, including from Russia. Domestic uranium mining remains at a fraction of its post-WWII peak, highlighting the need for significant investment to reduce dependence on foreign sources and strengthen U.S. energy security.
Permitting
Permitting reform is likely to be a top priority in a second Trump administration, with a shift toward centralized decision-making and reduced regulatory barriers. After decades of decline, U.S. mining is regaining prominence, driven by the energy transition, renewed demand, and bipartisan consensus on the needs to reduce U.S. supply chain dependence on China. Reviving centralized oversight and permitting would likely help revitalise the industry by centralizing permitting and decision-making in Washington, significantly reducing bureaucratic delays.
Both Trump and Elon Musk, who has been nominated to head a new Department of Government Efficiency (DOGE), have stressed the need for bringing more mines online. KSG assesses that Musk will leverage his influence with the new White House to advocate for streamlined federal oversight. Additionally, faster permitting processes would enhance Tesla’s supply chain security, particularly for critical minerals like lithium and nickel.
KSG assesses that Trump is likely to expedite mining permits on federal lands and overturn President Biden’s moratorium on mining in Minnesota’s Boundary Waters Area, aligning himself with Republican criticism of banning mining in the area.
IRA Clean Energy Tax Credits
KSG assesses that Trump is likely to repeal IRA tax credits for EVs and renewable energy, potentially dismantling the legislation. Musk will likely advocate for repealing EV tax credits, which currently benefit Ford and GM more than Tesla due to their legacy costs. Eliminating subsidies would enhance Tesla’s competitive edge as a pure-play EV maker, allowing it to capture market share domestically, even if overall EV demand growth slows. KSG assesses that investments in solar and onshore wind energy will persist, even with reduced subsidies, albeit at a slower pace, driven by the cost competitiveness of electricity generated from these renewable sources.
However, repealing the IRA will likely face resistance, including from Republican lawmakers, as GOP districts have disproportionately benefited from IRA-driven investments in EV, battery, and solar manufacturing. Losing these subsidies will likely reduce EV demand, weaken U.S. critical mineral supply chains, and hinder domestic mining growth, increasing reliance on China.
U.S. EV Market Share by Brand (2023)
Tariffs
KSG assesses that imposing tariffs on critical mineral imports from China would likely incentivize domestic extraction by making U.S. mining operations more competitive and stabilizing prices of key critical minerals currently depressed by global oversupply. While this would benefit domestic mining, tariffs on processed minerals would likely harm U.S. industries reliant on these materials—such as EV manufacturing—by increasing production costs and reducing domestic consumption.
KSG anticipates that China, which dominates the refining of critical minerals, would likely retaliate against U.S. tariffs by imposing export restrictions on these materials—a tactic it has previously employed. Given the U.S.'s heavy reliance on China for critical minerals—especially REE essential for defense technologies—such measures could significantly disrupt the manufacturing of key equipment including permanent magnets (used in wind turbines, EVs, and military applications such as weapon systems and precision guided munitions). KSG assesses that such retaliatory moves would likely increase incentives for the incoming Trump administration to prioritize and expedite the development of domestic critical mineral mining and processing operations, ultimately eroding China’s market share, supply dominance, and pricing power.
Defense Procurement
KSG assesses that increased military spending under a Trump administration is likely to include greater procurement of critical minerals essential for defense. Expanding the National Defense Stockpile with reserves sourced from domestic projects would help insulate U.S. defense industries from potential Chinese export restrictions on critical minerals, a likely retaliatory measure in response to tariffs. Implementing a long-term stockpiling program with guaranteed, pre-negotiated prices for producers could further mitigate against price volatility and encourage greater investment in U.S. mining and processing operations. Likely beneficiaries of such a program include junior miners focused on REE extraction, such as American Rare Earth, MP Materials, and Ramaco Resources, which would gain greater price stability and market certainty to advance their projects.
International Collaboration
KSG assesses that Trump is likely to avoid broad international collaboration on critical minerals, favoring bilateral agreements over comprehensive initiatives or free trade agreements (FTA). Trump is unlikely to support the MSP, casting uncertainty over its future. Trump is also unlikely to prioritize the 2022 MOU with the DRC and Zambia, which aims to build a complete cobalt and copper value chain, which would likely require significant private-sector investment from battery and EV manufacturers in the U.S., EU, Japan, or South Korea—a move Trump is unlikely to emphasize.
Instead, Trump is likely to support investments by Gulf nations, particularly Saudi Arabia and the UAE, in African mining operations and infrastructure projects for mineral transport and export. These Gulf countries act as relatively neutral players in the U.S.-China competition for African critical minerals, offering financing, trade infrastructure, and potential future refining capabilities. KSG assesses that Trump would likely endorse Gulf sovereign wealth funds acquiring African critical mineral assets to counter Chinese influence, building on initiatives such as the Biden administration’s 2024 effort to facilitate the sale of DRC copper assets to Swiss trader Mercuria.
Trump is likely to prioritize narrower bilateral agreements with key critical mineral suppliers, avoiding the broader commitments of FTAs. Argentine President Javier Milei has expressed interest in pursuing an FTA with the U.S., potentially paving the way for a more limited partnership aimed at reducing U.S. dependence on Chinese-processed lithium—an initiative likely supported by Musk, who has ties to Milei and an interest in diversifying Tesla’s lithium supply. Similarly, Indonesia, the world’s largest nickel producer, has shown interest in a bilateral trade agreement with the U.S. akin to Japan’s arrangement. Such a deal could enhance U.S. access to Indonesian nickel and cobalt, reducing Chinese dominance in these sectors. However, Indonesia’s insistence on local refining requirements may pose challenges during negotiations. sector. However, Indonesia’s insistence on local refining may complicate negotiations.
Most Likely Scenario in 12 Months (December 2025):
The Trump administration will have imposed tariffs on critical mineral imports from China.. Domestic critical mineral projects will be advancing at a faster pace, supported by price protection and increased investment driven by reduced competition from lower-cost imports. However, Chinese retaliation through critical mineral export restrictions will be beginning to impact the domestic production of renewable energy technologies—such as EVs, batteries, and wind turbines—as well as essential military equipment, highlighting the strategic importance of expanding U.S. supply chain resilience.
The Trump administration will have repealed EV tax credits, reducing U.S. EV sales and causing the U.S. to lag further behind China in the transition to EVs. This disproportionately hurts Ford and GM, which face higher costs transitioning to EV production, while Tesla capitalizes on its EV-only model to gain market share from legacy automakers.
The Trump administration will be accelerating permitting processes on federal lands, unlocking new opportunities for mineral extraction.. Trump will have reversed Biden’s ban on copper mining in Minnesota’s Boundary Waters Area, winning Republican support but igniting significant backlash from environmental activists. Despite the controversy, Trump will press forward with mining initiatives, resisting pressure from advocacy groups. Trump will also have side-lined environmental litigation challenging Biden’s permit for the Rhyolite Ridge lithium deposit in Nevada, paving the way for mining operations to proceed.
Under Musk’s leadership, the DOGE will be streamlining and centralizing mining regulations, reducing the influence of state and local authorities and creating a more favorable regulatory environment.
With financial support, reduced regulatory burdens, and protection through tariffs, the U.S. mining sector will be attracting greater private sector investment. Investors will be betting on long-term growth in critical mineral demand and an eventual price recovery, boosting the sector’s trajectory.