Critical Minerals: The New Power Play in Global Trade

Estimated reading time: 10 minutes

Access to critical minerals essential for electronics manufacturing, and China’s monopoly of them, is increasingly under scrutiny, with gallium (Ga) and germanium (Ge)at the forefront of this discourse. However, all critical minerals imported from China share a similar narrative, and understanding the implications of this dependency and the risks to both U.S. commercial and defense sectors has created an urgent need for a comprehensive electronics strategy to secure and diversify access to these vital minerals. In this candid interview, USPAE Executive Director Jim Will discusses the issues and the mitigation steps that must be taken to adequately address them.

Marcy LaRont: China’s dominance in critical minerals is not news. I recently read the phrase, “weaponizing trade flows,” which is possible whenever a country has dominance in any critical supply. Can you outline the broader strategic implications of this control for U.S. commercial and defense sectors?

Jim Will: When we think of defense and security, we often picture wars fought with bullets and missiles. That's what’s referred to as kinetic warfare. However, there are also non-kinetic dimensions such as economic leverage and supply chain control. Critical minerals fall into this category: The controlling nation, which in this case is China, can restrict or manipulate the supply, impacting both commercial and defense industries.

Gallium is a critical mineral for electronics, and China controls nearly the entire global supply chain as part of its national strategy. It dominates the supply chain as part of its national strategy. The commercial demand for gallium is far larger than what is needed for defense electronics. But while the defense need for those materials is smaller, it is no less critical, particularly for advanced radar and high-performance chips. China has implemented export restrictions on gallium for military use. The potential risk is real, given China’s overwhelming control of production and refining capacity.

With germanium, China not only dominates the refining capacity but also controls the companies that manufacture the crystal-growing equipment, giving it extensive leverage over the supply chain.

LaRont: When you talk about their long-term strategy, China has created a monopoly by investing in as much mineral processing ability as possible.

Will: Yes, China’s playbook for minerals is similar to what they've done in other strategic sectors, including shipbuilding, semiconductors, packaging, and other electronic components, effectively creating monopolies. This underscores the need for a comprehensive U.S. national electronics strategy, rather than focusing on single elements of the supply chain. I’m concerned that we may be actively perpetuating the problem. While recent government awards and the defense industrial-based consortium are welcome, their almost exclusive focus on our critical minerals and raw materials risks overlooks broader issues with Chinese monopolies in the electronics industry.  We’ve discussed how commercial tablets and displays rely on Chinese components, along with reports indicating that more than 6,500 components of Chinese origin are currently used in Ford-class aircraft carriers.  What’s needed is a more comprehensive strategy that links upstream resources with downstream manufacturing and innovation.

LaRont: You have previously stated that the U.S. needs not just an advanced manufacturing strategy, but a comprehensive electronics strategy. They are inextricably linked.

Will: Yes, electronics power our missiles, bullets, and virtually every piece of critical defense systems and equipment. Electronics are also essential to the equipment itself, such as machining and microelectronics fabrication tools that are the foundation for defense and commercial industries. While there has been movement toward an advanced manufacturing strategy at the federal level, what’s truly needed is a comprehensive national electronics strategy. Advanced manufacturing is a critical piece, but the endgame is electronics themselves, and it’s not only about minerals.

LaRont: Governments need a more complete view. A singular focus is to the detriment of the whole because anything dependent on many things won’t be taken care of, even if one issue is successfully addressed.

Will: Exactly. With critical minerals, it adds insult to injury. The U.S. invented the extraction and purification of these materials, yet many of the capabilities and companies China controls today trace their roots back to U.S. innovations and firms. The same applies to semiconductors. Pioneered here through DoW (DoD) and DARPA programs, the U.S. once led the world, but decades of offshoring and foreign investment have shifted the leadership abroad. Now we are trying to claw that back. This highlights a comprehensive approach.

LaRont: Getting back to the specific issue of critical minerals, where does the U.S. stand with creating some independence there?

Will: Even today, a significant amount of critical minerals can be recovered from coal fly ash piles, and the U.S. has the expertise to make this happen. The Department of Energy has launched initiatives and provided funding to develop these extraction and separation technologies, and received funding to begin developing this type of technology. That said, it’s important to recognize that mining and mineral processing sciences have centuries of history, and translating pilot-scale advances into reliable, commercial-scale production will require time, infrastructure, and sustained investment.

LaRont: The gap is not about technical ability, but commercial economics, something that has been true for the United States on the global stage across the full spectrum of electronics manufacturing.

Will: We are a capitalist economy, but the challenge comes when you have both national and economic security at stake. Competitors like China heavily subsidize and undercut markets, putting themselves in the pole position they currently enjoy and making it impossible for domestic and allied manufacturers to enter the market.  And without a clear long-term business pipeline and strong demand signals, U.S. companies simply won’t engage in that business. The gap isn’t technical, it’s economic.

That’s why, at this critical juncture for both national security and our domestic economy, government leaders must carefully consider what actions we are prepared to take to enable the infrastructure needed to support electronics manufacturing on U.S. soil. Without that commitment, we risk repeating the flat panel display lesson from 25 years ago when facilities were built, only to receive demand for a handful of units and no sustained,  long-term pipeline.

What’s needed now is leadership to help shape long-term solutions and demand signal that gives U.S. companies the confidence to invest and compete.

LaRont: Earlier, you said that the government is under the misguided thought it can still utilize a World War II-type approach to the market, which is simply no longer the case.

Will: Yes, that’s true. At the NDI Emerging Technologies ETI conference a few weeks ago, the top services procurement leaders spoke about the need to scale and surge our industrial base to expand capacity. We still lean on a WWII–style mindset, as described in Freedom’s Forge, believing we can rapidly mobilize industry the same way it did then. In WW II, we had an extensive domestic onshore industrial base and supply chain. Manufacturers were told, ‘You’re competitors in peacetime, but right now you’re Americans, and you will build for the nation’—and they did exactly that.

Just think of the need for drones and the massive quantities being used in the Russia-Ukraine war. The reality is that supplying drones today is nothing like mobilizing in the 1940s. This relies on a global, highly specialized supply chain. One of the most critical choke points is printed circuit boards. The U.S. currently cannot manufacture ultra high density interconnect (UHDI) PCBs at scale, so we rely heavily on China and other foreign suppliers for this foundational technology, along with many other components.

LaRont: The market for gallium (Ga) and gallium nitride(GaN) is huge. The gallium nitride market for semiconductor devices is currently valued between $20 billion and $30 billion, with $40 billion projected in near-term growth. With that perspective, what does risk mitigation and planning look like in the United States?

Will: There are some encouraging efforts underway. For example, the Defense Logistics Agency already maintains a germanium stockpile and is considering similar action for gallium. We are working to recycle germanium (Ge) from demilitarized systems. These are positive steps, but they only provide a cushion of maybe months’ worth of supply that may help in a quick surge, but not enough to be sufficient for sustained demand.  Real risk mitigation requires developing secure and diverse sources and advancing our capability to extract and refine from alternatives such as coal ash, while building long-term demand to sustain the capabilities. Without that, the U.S. remains highly vulnerable, even as gallium and gallium nitride device markets grow from $20–30 billion today toward $40 billion in the near term.

Comprehensive efforts are also underway, with federal efforts funding projects to prove out the ability to extract and purify critical minerals from sources such as coal ash. While these technologies could be realized in a few years with a pilot line type capability, the concern is the inability to address a mineral shortage on a wider scale.

LaRont: What is our real risk in 2026? Will we see something significant, or do we have a little longer runway?

Will: I believe our runway extends beyond 2026 because a Ga restriction would reverberate across the global market and not just the U.S. That’s why I don’t think China plans a complete cutoff, but rather targeted restrictions and licensing that allow it to use supply as a tool of leverage in response to U.S. actions such as tariffs or as non-kinetic effect in the event of a conflict.

Regarding the potentially detrimental impact on trade and electronics manufacturing in the 2026 timeframe, it is essential to acknowledge the growing potential for conflict in the Indo-Pacific. China has announced that, by 2027, it would be prepared to take action to retake Taiwan. Accelerating efforts in critical minerals extraction, processing, and reclamation as part of a comprehensive domestic electronics strategy could mitigate some of the leverage that China currently holds. If China were to cut off critical minerals that are used in printed circuit boards and other electronics that power our military and economy as a means of pressuring the United States not to engage in a conflict, then maybe we should be thinking about executing this plan more quickly.

LaRont:  If the narrative in Washington changes and there is more openness to the reality about the level of investment needed to support a critical minerals mining and processing infrastructure, how long will it take to get some domestic supply? What are the natural next steps that should happen?

Will: The MCEIP (Manufacturing, Capability Expansion, and Investment Prioritization) office has initiated some investments targeting critical minerals, such as the Tungsten project, awarded via Golden Metal Resources. These are meaningful steps, but are early and relatively narrow in scope. Nor are they part of a comprehensive electronics strategy. The reality is that we cannot onshore everything; some minerals simply don’t exist in the U.S., so we must also leverage resources and refining capacity with trusted allies like Australia and Japan. With decisive action and effective execution, limited domestic supply, along with considerable supply from allied sources, could begin coming online within 12–24 months.

Building a scalable, durable, and resilient electronics supply chain with the ability to scale will require a broader strategy that goes well beyond minerals, aligning upstream resources with downstream manufacturing and demand signals. At the highest level, we must expedite real solutions and recognize the inextricable link between the critical minerals and the electronics they enable. Both must advance in parallel to sustain Defense Industrial Base capabilities.

No matter how much we address and scale critical minerals, if we don’t address the corresponding national and economic security needs for electronics, we lose. We can't have one without the other.

LaRont: Jim, thank you for your time and insight.

Will: Good to talk to you again, Marcy.

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