An expert in critical minerals told U.S. senators Wednesday that Canada will be a key ally in efforts to reduce America's reliance on Chinese supply — after President Donald Trump spent months claiming the United States doesn't need anything from its northern neighbour.
Gracelin Baskaran, director of critical minerals security at the Center for Strategic and International Studies in Washington, D.C., told the Senate finance committee that the U.S. only has 1.3 per cent of the world's rare earths.
"The uncomfortable truth is we are not going to do this alone," she said.
The hearing on trade in critical supply chains also included experts in semiconductors, medical technology and soybean farming who spoke about the ways Trump's sweeping tariffs are affecting their industries.
Rare earth elements are used in the manufacture of electric vehicles, powerful magnets, smartphones, fighter jets and submarines, among other products. China, however, has long dominated the global industry, particularly in processing rare earth minerals.
Trump has said he wants the United States to lead the global critical minerals trade but has been sending conflicting messages about how he expects the U.S. to achieve that goal.
He signed a controversial executive order to pursue deepsea mining and in April launched a trade investigation that would be a precondition for hitting processed critical mineral imports with tariffs. Trump forced Ukraine to sign a critical minerals agreement in exchange for continued U.S. support in its defence against Russia's aggression.
When Trump escalated the trade war between the world's two largest economies in April with massive tariffs, China responded with retaliatory duties and export restrictions on various critical mineral exports to the U.S., causing anxiety throughout supply chains.
The U.S. "faces a severe level of vulnerability in its access to minerals," Baskaran said, adding that imposing sector-specific duties on ore imports would make it too expensive to develop processing capabilities in the United States. Tariffs on countries that have critical minerals geographically unavailable to the United States could also hinder American industry as China works to further its influence, she said.
Trump implemented a 10 per cent universal tariff on nearly all countries in April, saying he'd allow 90 days for nations to make a deal.
He slapped 25 per cent economywide duties on Canada and Mexico the month prior, then partially walked them back a few days later for imports compliant under the Canada-U.S.-Mexico Agreement on trade, called CUSMA. Trump also imposed tariffs on steel, aluminum and automobiles.
Canada has 34 critical minerals and metals and Canadian officials have been cycling through Washington for months making the case that partnering together is a better strategy to push back on China. Ontario Premier Doug Ford called it "Fortress Am-Can," while then-energy minister Jonathan Wilkinson called for a resource alliance.
Canada and the U.S. Department of Defense already have a co-investment deal to accelerate Canadian mining development and strengthen critical minerals supply chains.
Trump, meanwhile, has repeatedly claimed that the U.S. doesn't need anything from Canada.
"We don’t need their Cars, we don’t need their Energy, we don’t need their Lumber, we don’t need ANYTHING they have, other than their friendship,” Trump said in a post on social media before meeting with Prime Minister Mark Carney in Washington last Tuesday.
Sen. Maggie Hassan, a Democrat from New Hampshire, told Wednesday's hearing that Canada has an abundance of critical minerals and is co-operative with the U.S.
"Instead of working with Canada on critical minerals trade, the president has targeted Canadian imports with truly reckless tariffs while making concessions to the Chinese government to try to access their mineral reserves," she said.
When asked if the Trump administration should prioritize trade with Canada, Baskaran said "Canada is going to be one of our strongest allies if we are going to reduce reliance on China."
Baskaran said the critical minerals sector was already integrating between both countries. Canada’s uranium reserves are 10 times larger than America's and the U.S. is increasing its capabilities for enrichment, she said.
Canadian companies refine zinc produced in the United States, creating germanium used in American manufacturing.
"Given the mining, refining and manufacturing, they are so vertically integrated," Baskaran said. "We will not be able to do it without strengthening our relationship with Canada."
Picture Courtesy: THE CANADIAN PRESS/Chris Young
