US, Australia Seal $8.5B Deal as China Tightens Exports

US President Donald Trump and Australian Prime Minister Anthony Albanese signed a critical-minerals deal at the White House on Monday as the US eyes the continent’s rich rare-earth resources when China is imposing tougher rules on exporting its own critical minerals abroad.

The two leaders described the agreement as an 8.5 billion-dollar (£6.3 billion) deal between the allies. Mr Trump said it had been negotiated over several months.

“Today’s agreement on critical minerals and rare earths, is just taking” the US and Australia’s relationship “to the next level”, Mr Albanese added.

This month, Beijing announced that it will require foreign companies to get approval from the Chinese government to export magnets containing even trace amounts of rare-earth materials that originated from China or were produced with Chinese technology.

Mr Trump’s Republican administration says this gives China broad power over the global economy by controlling the tech supply chain.

“Australia is really, really going to be helpful in the effort to take the global economy and make it less risky, less exposed to the kind of rare earth extortion that we’re seeing from the Chinese,” Kevin Hassett, the director of the White House’s National Economic Council, told reporters on Monday morning ahead of Mr Trump’s meeting with Mr Albanese.

Mr Hassett noted that Australia has one of the best mining economies in the world, while praising its refiners and its abundance of rare earth resources.

Among the Australian officials accompanying Mr Albanese are ministers overseeing resources and industry and science, and Australia has dozens of critical minerals sought by the US.

The prime minister’s visit comes just before Mr Trump is planning to meet Chinese President Xi Jinping in South Korea later this month.

ADVERTISEMENT

For Mr Albanese’s part, the prime minister said ahead of his visit that the two leaders will have a chance to deepen their countries’ ties on trade and defence.

Another expected topic of discussion is Aukus, a security pact with Australia, the US and the UK that was signed during former president Joe Biden’s Democratic administration.

Mr Trump has not indicated publicly whether he would want to keep Aukus intact, and the Pentagon is reviewing the agreement.

“Australia and the United States have stood shoulder to shoulder in every major conflict for over a century,” Mr Albanese said ahead of the meeting. “I look forward to a positive and constructive meeting with President Trump at the White House.”

The centre-left Mr Albanese was re-elected in May and suggested shortly after his win that his party increased its majority by not modelling itself on Trumpism.

“Australians have chosen to face global challenges the Australian way, looking after each other while building for the future,” Mr Albanese told supporters during his victory speech.