FEBRUARY 10 — In the early months of 2026, global economic and geopolitical tectonics shifted once more — not in the South China Sea, or in headline-grabbing trade wars, but in the deep, often overlooked supply chains of critical minerals. 

These are the elements — from rare earths to lithium, cobalt and gallium — that power the technologies of our age: electric vehicles, 5G networks, semiconductors, defence systems, renewable energy, and even artificial intelligence. 

Control over these minerals is no longer just a business concern — it has become a strategic imperative.

The United States, under the leadership of Vice President JD Vance, has proposed a bold new initiative: the creation of a preferential trade bloc for critical minerals. 

In a gathering of ministers from more than 50 countries in Washington, the US outlined plans to establish coordinated price floors and collaborative trade rules aimed at reducing the global economy’s deep dependence on China’s dominant position in mineral processing and supply chains.

To many policymakers, this is less a traditional trade deal and more an urgent rewrite of global economic strategy. 

For decades, China has invested heavily in the upstream and downstream stages of mineral production — from mining and refining to chemical processing — giving it decisive influence over pricing and availability. 

In some cases, China controls more than two-thirds of refining capacity for key minerals. This degree of concentration creates vulnerabilities that stretch well beyond economic competition into the realm of national security itself.

Under the US proposal — tentatively dubbed a “critical minerals alliance” — participating countries would adopt reference prices and adjustable tariffs to prevent under-priced imports from disrupting investment and local industry viability. 

The idea is straightforward: stable, predictable pricing and supply can encourage investment in mining and processing outside China’s orbit. 

The United States is also complementing this with Project Vault, a new stockpiling initiative backed by billions in public and private funding designed to build strategic reserves of essential minerals.

Such moves are already generating real-world reactions. Shares in some US mineral firms declined in the immediate aftermath of the announcement as markets digested the potential implications of government-coordinated pricing. 

Meanwhile, Argentina — fresh off concluding its own critical minerals agreement with Washington — stressed that it will not bar Chinese investment in its mining sector, illustrating the complex reality facing resource-rich nations trying to balance opportunity with strategic autonomy.

And then there’s China’s response: Beijing has openly criticised the initiative, framing it as an exclusive “small-circle” approach that risks undermining the open international economic order. 

Chinese officials argue that protectionist blocs will fragment global supply chains rather than stabilise them, while stressing their own role in maintaining industrial flows globally.

That pushback is predictable — strategic competition between major powers rarely unfolds without diplomatic friction — but it highlights a deeper truth: the old assumptions of unfettered free trade and global supply chain integration have been strained by recent events. 

A series of export restrictions, tariff conflicts, and pandemic-era bottlenecks exposed the fragility of supply chains once taken for granted. Critical minerals, because of their centrality to modern infrastructure, were thrust to the forefront of this vulnerability.

For Asean and other middle powers, this moment is both a challenge and an opportunity. Southeast Asia sits on vast untapped reserves of the same critical minerals that have become central to superpower competition. 

With the right framework, countries in the region could attract investment, build processing capacity, and gain bargaining leverage in a multipolar supply chain landscape. 

This requires careful policy design: aligning environmental standards with investment incentives, ensuring local industrialisation and value-addition rather than mere extraction, and maintaining strategic autonomy amidst great-power rivalries.

Yet, the prospect of “decoupling” from China entirely is neither realistic nor desirable. China’s industrial ecosystem, honed over decades, is embedded deeply in global markets. 

The wiser path for the international community is not to erect impermeable blocs but to diversify, decentralise and de-risk the global network of supply relationships. 

Collaboration among like-minded partners on standards and investment is one dimension; integrating emerging economies into these frameworks with respect for their developmental priorities is another.

The US proposal for a critical minerals trade bloc is more than a policy pivot — it signals a recognition that the 21st-century economy will be shaped as much by who controls the elements beneath our feet as by who innovates on screens above them. 

The ultimate success of this effort will depend on whether countries can balance national interests with cooperative, sustainable integration of global supply chains — beyond zero-sum competition, towards shared resilience.

In a world jittery from geopolitical shocks, that’s a future worth pursuing.

* Phar Kim Beng is a professor of Asean Studies and director of the Institute of International and Asean Studies, International Islamic University of Malaysia.

** This is the personal opinion of the writer or publication and does not necessarily represent the views of Malay Mail.