US to host meeting on rare earths as China-Japan spat simmers

THE US will host a gathering of Group of Seven (G7) ministers to discuss rare earths this week, underscoring the shared push to develop alternative supplies in an industry dominated by China.

Canadian Finance Minister Francois-Philippe Champagne will be in Washington on Sunday (Jan 11) and Monday to meet G7 counterparts, Ottawa said in a statement, adding Treasury Secretary Scott Bessent would host the talks “to discuss global supply chains for critical minerals”.

The discussions are expected to also include officials from Australia, South Korea, India, Mexico and the European Union, and focus on critical raw materials and the security of global supply chains. The meeting comes as Japan steps up efforts to reach out to its G7 peers and others amid concerns over new export restrictions China imposed following a dispute over comments Prime Minister Sanae Takaichi made about Taiwan.

Japanese Finance Minister Satsuki Katayama has said she would meet with counterparts from other industrialised democracies to discuss the minerals critical to military production and the tech industry during a trip to the US starting on Sunday.

China’s curbs on shipments of rare earth products to Japan now extend to those for civilian use, Nikkei Asia reported, citing sources familiar with the trade. The report added that officials in China are refusing permission for shipments sought by companies, while in other cases, reviews of applications are taking longer than usual.

China’s Foreign Ministry did not immediately respond to a request for comment about the meeting in Washington and the Nikkei report.

Japan’s claims that China is “weaponising” rare earths are misleading, Lu Yaodong, deputy director of the Institute of Japanese Studies at the Chinese Academy of Social Sciences, was quoted as saying in an article in the Global Times. China’s moves stem from Japan’s “remilitarisation,” Lu said.

China is the world’s dominant supplier of rare earths, helping Beijing last year counter punitive tariffs from the Trump administration by restricting their export.

US President Donald Trump and Chinese leader Xi Jinping reached a trade truce in October that included agreements to end restrictions on rare earth exports. Still, Washington has continued to pursue policies intended to cut reliance on Chinese supplies of rare earth magnets, which are also used in a wide variety of consumer products, including autos and electronics.

Last week, White House trade adviser Peter Navarro predicted American industrial breakthroughs would help boost domestic production and eliminate China’s market dominance.

Germany has also signalled it wants to play a major role as Western nations seek alternative supplies. Vice-Chancellor and Finance Minister Lars Klingbeil said before departing for the meeting in the US that Germany was open to taking “joint action” with international partners to bolster supply chains and ensure access to materials critical to manufacturing. BLOOMBERG