U.S. Spends $46 Billion to Outpace EU in Raw Materials

The Federal government of the United States has allocated approximately $46 billion to critical raw-material projects over the five years ending in February, an investment roughly eight times larger than that of the European Union. Washington is utilizing grants, tax breaks, and financing through the Export-Import Bank of the United States to secure preferential access to minerals in Brazil, Ukraine, and the Democratic Republic of Congo.

This aggressive spending has created friction with the EU, as American companies frequently outbid European counterparts for production deals. For example, USA Rare Earth has acquired producers like Serra Verde, which entered a 15-year deal to sell magnetic rare earths to a U.S. government-capitalized vehicle. Additionally, the United States Department of Defense has ordered contractors to remove Chinese rare earths from magnet supply chains by next year.

While the U.S. and EU signed a memorandum of understanding in April to cooperate, European officials fear a protectionist U.S. administration might prioritize domestic needs over allies during shortages. In response, the EU is establishing a 3-billion-euro financing hub and pursuing partnerships with Canada and South Africa to diversify its own supply chains by 2030.