The US Is Unlikely to Curtail China’s Critical Minerals Dominance

Why It Matters

China’s dominance threatens U.S. supply‑chain security and limits the effectiveness of American policy aimed at reshoring critical minerals, impacting the broader clean‑energy transition.

Key Takeaways

• China supplies over 80% of global battery production
• US holds minority stakes in Latin American lithium firms
• Chinese firms remain embedded via joint ventures in South America
• American companies lack cost advantage to replace Chinese production
• Political shifts in Argentina favor US, but Chile resists

Pulse Analysis

China’s grip on the critical‑minerals ecosystem has tightened as battery demand exploded after 2020. The International Energy Agency notes that Chinese firms produce more than 80 percent of all lithium‑ion batteries and about 90 percent of grid‑scale storage units, a share driven by low‑cost manufacturing and vertically integrated supply chains. This dominance extends beyond batteries to the raw materials—lithium, cobalt, nickel and rare earths—where Chinese state‑backed enterprises secure mining rights and processing capacity across Africa, Australia and the Americas. The result is a global market that pivots on Chinese output and pricing.

The United States has responded with a high‑profile critical‑minerals summit and a series of strategic investments. Washington now holds minority stakes in Lithium Americas and USA Rare Earth, and has pledged billions in financing for Latin‑American projects through the Inter‑American Development Bank. Yet these moves intersect with entrenched Chinese joint ventures, such as Ganfeng’s partnerships with Lithium Americas in Argentina, which keep Chinese supply lines intact. Tariff threats and “America‑first” rhetoric clash with the reality that private U.S. firms lack the scale and cost structure to out‑compete Chinese producers.

Looking ahead, political changes in Argentina may give Washington a foothold, but Chile’s nationalist lithium strategy and Bolivia’s state‑led model limit American leverage. Even if right‑wing governments align with U.S. interests, replacing China’s integrated network would require massive capital, new processing facilities, and a workforce competitive on wages—resources the North American economy currently lacks. Consequently, the prospect of curbing China’s critical‑minerals dominance remains remote, forcing companies and policymakers to focus on diversification, resilience, and strategic partnerships rather than outright decoupling.