Addressing the Threat to the Domestic Supply Chain From Reliance on Critical Minerals From Foreign Adversaries and Supporting the Domestic Mining and Processing Industries

Overview

Purpose and Intent

Executive Order 13953, issued on September 30, 2020, by President Donald Trump, represents a heightened focus on reducing the United States' dependency on foreign-sourced critical minerals. The order acknowledges the strategic importance of these minerals for both economic stability and national security, emphasizing that over-reliance on imports, particularly from adversarial nations, poses significant risks. The EO builds upon EO 13817 by intensifying efforts to identify and mitigate these dependencies and formalizing a national emergency to mobilize resources and streamline domestic production.

This EO specifically targets reliance on countries like China, which has a dominant position in the global market for many of these critical minerals. The directive underscores the vulnerability of the U.S. to supply disruptions and seeks to bolster domestic mining, processing, and recycling capacities. By doing so, it not only aims to protect existing industries but also anticipates emerging technological needs that will require substantial mineral input, such as electric vehicles, 5G technology, and advanced electronics.

Furthermore, the EO highlights the multifaceted approach needed to ensure a robust supply chain. This includes expanding domestic capabilities, promoting research and innovation in processing technologies, and fostering international collaboration to stabilize supply lines. It also calls for a strategic overhaul in governmental coordination to enhance policy implementation efficiency across various stakeholder agencies.

Implementation Strategy

The order mandates that the Secretary of the Interior conduct a thorough investigation into foreign reliance for critical minerals, with a report due to the President within 60 days. This report is expected to drive subsequent actions, which may include imposing tariffs, quotas, or other import restrictions targeting countries whose practices undermine U.S. interests. Additionally, the order seeks regular updates and ongoing assessments to refine the strategy and adapt to changing circumstances.

Moreover, the EO instructs relevant agencies to develop strategies articulating the use of existing legal authorities and funds to achieve its objectives. This includes the identification of funding opportunities for supporting innovations in critical mineral extraction and processing, and recommendations for legislative or regulatory changes that may further these goals.

Legal and Policy Implications

Constitutional and Legislative Framework

EO 13953 leverages the International Emergency Economic Powers Act (IEEPA) and the National Emergencies Act (NEA) to address what it deems a national emergency. The invocation of these acts signals a significant escalation in the U.S. government's approach to mineral resource security, utilizing broad executive powers to protect national interests. This reflects a strategic shift towards prioritizing resource independence as a component of national defense.

The order potentially sets the stage for new regulatory frameworks aimed at reducing bureaucratic impediments to mining and processing initiatives. By directing agencies to streamline permitting processes, it seeks to counteract the regulatory inertia that often accompanies large-scale industrial projects. This could involve reinterpretation or revision of existing regulations that pertain to environmental law, land use, and energy policy.

Amendments to Existing Policies

Amending EO 13817, this order clarifies and expands the list of critical minerals, reflecting current data on supply and demand dynamics as well as geopolitical considerations. It emphasizes the importance of periodically updating this list to accommodate technological advancements and shifts in global mineral supplies, thereby ensuring that U.S. policy is responsive and robust.

The directive for agencies to explore cooperative bilateral and multilateral agreements reflects a policy shift towards leveraging alliances to mitigate resource vulnerabilities. This move highlights the administration's recognition of the interconnected nature of global supply chains and the necessity of fostering stable international partnerships.

Strategic Significance

The EO's focus on rare earth elements and other critical minerals underscores their strategic importance in the modern economy. Their role in manufacturing sectors essential for national defense, energy independence, and cutting-edge technology development positions these minerals as central to the U.S.'s long-term industrial strategy. This elevation of mineral resource security to a national priority could redefine resource management and economic policy in the U.S.

Who Benefits

U.S. Mining and Processing Industries

The primary beneficiaries of EO 13953 are domestic mining and processing industries, which stand to gain from increased government support and investment aimed at expanding production capacities. By prioritizing the development of a robust supply chain, these industries could experience a resurgence in employment and economic activity, particularly in regions historically reliant on mining and manufacturing.

Corporations involved in technology and defense manufacturing will also benefit from a more reliable supply of critical minerals. Ensuring a steady supply not only stabilizes production costs but also provides these sectors with the confidence to expand operations and invest in research and development, thereby enhancing U.S. competitiveness in global markets.

Technological and Infrastructure Advancement

The order directly supports sectors integral to technological advancement, particularly those involved in renewable energy technologies and next-generation telecommunications. By securing domestic mineral resources, these industries may experience reduced vulnerability to price volatility and supply chain interruptions, facilitating steady growth and innovation.

Additionally, companies and institutions involved in research on mineral processing technologies will have greater access to funding and collaborative opportunities. This can spur advancements in sustainable mining practices and alternative mineral sourcing, such as deep-sea mining or asteroid mining.

Economic Resilience and National Security

A strengthened domestic mineral supply chain contributes to broader economic resilience, insulating the U.S. from geopolitical tensions that could disrupt global markets. The strategic decrease in dependency on foreign sources for critical minerals enhances national security, aligning with defense strategies that require stable access to these resources.

Who Suffers

Environmental and Local Community Concerns

While EO 13953 aims to boost domestic mineral production, it may have adverse effects on environmental protection and local communities. Accelerated permitting processes and expanded mining operations could potentially lead to environmental degradation, affecting ecosystems and local biodiversity. Communities located near mining sites might encounter disruptions due to increased industrial activities.

The expedited development may also sideline community voices, particularly indigenous groups and local residents, who often have limited say in how mineral resources are extracted in their regions. There is a risk that these communities could suffer from reduced environmental oversight or insufficient engagement in regulatory processes, potentially leading to conflicts over land use and resource management.

International Trade Relations

Nations with significant roles in global mineral supply chains, notably China, might experience economic repercussions due to U.S. efforts to diversify its sources and boost domestic production. The imposition of tariffs or import restrictions could incite retaliatory measures, strain trade relations, and heighten geopolitical tensions.

Additionally, countries currently relying on exports to the U.S. might face diminished economic prospects as American industries work toward mineral self-sufficiency. This could affect diplomatic ties and lead to broader discussions about fair trade and supply chain dependencies.

Global Environmental Standards

The push for rapid development within U.S. borders might undermine global environmental standards. The pressure to meet production goals could encourage practices that prioritize output over sustainability, potentially reducing the U.S.'s ability to advocate for responsible mining practices on the international stage.

Moreover, prioritizing domestic mineral sourcing could decrease incentives for investing in more sustainable or ethically sourced minerals from other countries, which might otherwise benefit from U.S. support and engagement.

Historical Context

Preceding Efforts and Policy Trends

EO 13953 is a natural progression from prior initiatives focusing on resource security and economic independence, reflecting longstanding policy trends aimed at reducing foreign dependencies. These efforts have been a recurring theme in U.S. policy, dating back to the Cold War, when the strategic significance of resource control first became apparent.

The Trump administration’s focus on economic nationalism and self-reliance is consistent with the broader “America First” agenda, which advocates for domestic industrial revitalization and reduced reliance on foreign entities. This EO highlights concerns about strategic vulnerabilities, mirroring historical anxieties about energy independence and resource shortages.

International Comparisons and Alliances

Globally, countries like Australia and Canada have adopted similar strategies to expand their domestic critical mineral production capabilities, cognizant of geopolitical shifts and market demands. The U.S.'s attempt to reinforce its mineral supply chains aligns with these international movements, emphasizing collaborative efforts among like-minded nations.

Ongoing initiatives involving alliances like the Five Eyes and other FPDA partners also provide a framework for cooperative action in securing critical mineral supply chains. These partnerships underscore a shared recognition of the importance of resource interdependence and strategic collaboration.

Legacy and Future Implications

In the long term, EO 13953 may set a precedent for future administrations to build upon, creating a durable infrastructure for mineral independence. If successful, these efforts could catalyze a broader industrial renaissance across the U.S., simultaneously addressing economic resilience and national security.

However, the order must be seen within the broader context of shifting political climates, potential changes in legislative priorities, and evolving global markets. The outcomes of these efforts may heavily depend on policy continuity and bipartisan support for maintaining a focus on strategic mineral independence.

Potential Controversies or Challenges

Legal Challenges and Constitutional Concerns

The invocation of the IEEPA and NEA to declare a national emergency has been a contentious topic, potentially opening the administration to legal challenges questioning the appropriateness and scope of these powers. Critics might argue that such measures overextend executive authority without definitive evidence of an imminent threat that justifies a national emergency.

Furthermore, lawsuits could arise from communities and environmental groups opposed to the accelerated permitting processes mandated by the EO. The potential relaxation of regulatory scrutiny to expedite mining projects could lead to legal confrontations over environmental protections embedded within existing U.S. law.

Congressional Pushback and Oversight

Given the balance of powers, the executive's expansive moves could face resistance from Congress, particularly from legislators concerned about environmental ramifications or adverse economic impacts on trade relations. There may be calls for increased oversight or legislative intervention to ensure comprehensive evaluations of the order's potential impacts.

Contentious hearings or investigations could stall or reshape the implementation of the EO, highlighting the need for strategic coherence and communication between the executive and legislative branches regarding mineral resource policies.

International Retaliation and Market Volatility

Internationally, the EO's implementation risks igniting trade disputes, especially with countries pivotal to global mineral supply chains. Tariffs or import restrictions could disrupt established trade networks, leading to market volatility and potential retaliatory measures from affected nations.

These developments might spur geopolitical tension, affecting broader diplomatic and trade relations. The intricacies of navigating these challenges underscore the importance of diplomatic engagement and reassurance to mitigate conflict and foster collaborative solutions.