In a strategic move to deepen economic cooperation and counter China’s dominance in critical supply chains, Japan has proposed a rare earth minerals partnership with the United States, according to reports from The Yomiuri Shimbun.
The proposal was reportedly put forward by Japanese Prime Minister Shigeru Ishiba during a recent phone call with U.S. President Donald Trump, as part of broader discussions aimed at reducing the U.S. trade deficit with Japan.
Targeting Economic Security
At the heart of the talks was economic security, with rare earths taking center stage. These 17 essential elements are used in everything from smartphones and electric vehicles to defense technologies. The U.S. currently lists them as critical minerals—and depends heavily on imports.
China’s Grip on Rare Earths
China has long dominated the global rare earth market, controlling over 60% of global mine production and nearly all of the refining capacity. Between 2019 and 2022, the U.S. imported roughly 72% of its rare earths from China, according to the U.S. Geological Survey. Japan, though contributing just 6% of U.S. imports, relies on Chinese mineral concentrates for its own supply.
China has previously used its control over rare earths as a geopolitical lever, raising concerns in Washington and Tokyo about supply chain vulnerabilities.
Japan’s Offer: Technical Support and Third-Party Processing
To reduce reliance on China, Japan is reportedly considering offering the U.S. technical expertise in processing and refining rare earth elements. Another option on the table: setting up joint processing operations in a third country with the necessary expertise and lower costs.
This kind of partnership could boost both nations’ resilience in high-tech manufacturing and defense, while also serving as a strategic counterbalance to China’s influence.
Semiconductors and Shipbuilding Also in Play
Rare earths weren’t the only bargaining chip. Prime Minister Ishiba also proposed cooperation in semiconductors and shipbuilding, areas where both nations have strong capabilities and shared concerns about Chinese dominance.
Japan leads the world in the number of semiconductor manufacturing plants, while the U.S. ranks second. With the Biden administration pushing to bring chip production back to U.S. soil, Tokyo’s offer of collaboration could support those reshoring efforts.
Meanwhile, China controls 70% of the global shipbuilding market. Japan’s proposal includes working with the U.S. to jointly develop and build next-generation ships, offering another avenue to diversify away from Chinese suppliers.
Bottom line: Japan is looking to turn strategic vulnerabilities into opportunities by teaming up with the U.S. on rare earths, semiconductors, and shipbuilding. As global supply chains grow more politicized, this proposed partnership could mark a significant shift in how two of the world’s largest economies confront shared challenges.