Japan proposes rare earth cooperation with US in trade talks

[Ben Graham]

Japan is looking to bolster its economic ties with the United States by establishing a partnership around critical minerals such as rare earths, local media reported.

According to The Yomiuri Shimbun, it is believed that Japanese Prime Minister Shigeru Ishiba presented this proposal in a phone call with US President Donald Trump on Thursday as part of the negotiation process to bring down the US trade deficit with Japan.

Amongst the topics discussed, the newspaper reported, were greater cooperation in economic security, including collaborations in rare earths.

Rare earth minerals have taken centre stage in America’s trade tussle with China, which weaponized its strong position in the supply chain by restricting exports to the US.

Infographic: Rare earth spheres of control

For decades, China has controlled the global rare earths supply and now accounts for over 60% of the world’s mine production and almost all of the processing. The US relies on imports of rare earths – a group of 17 elements used in a wide range of high-tech applications – and has them on its list of critical minerals.

Between 2019 and 2022, about 72% of the US rare earth imports came from China, according to the US Geological Survey. Japan also accounted for 6% of the imports, though its rare earth metals were derived from mineral concentrates produced in China.

The Yomiuri Shimbun, citing its sources, said the Japanese government is considering providing technical support for the processing and refining of these minerals. Another idea that has been floated is to process the minerals in a third country that has the expertise but at lower costs.

Also part of Ishiba’s proposed cooperative measures are semiconductors and shipbuilding, the newspaper said, with sources indicating that they too could be powerful bargaining chips in negotiations.

Japan currently has more semiconductor manufacturing plants than any other nation. Meanwhile the US, which has the second most, has been looking to redomicile some of the production so its exports will grow.

In shipbuilding, China also holds a dominant position in the global market with a 70% share. To mitigate Beijing’s influence, Tokyo’s proposal would involve the joint construction of next-generation ships, The Yomiuri Shimbun said.