The world faced significant uncertainty over the past week regarding the status of relationships between the US and both Russia and the Ukraine. In a volatile week, the US and Ukrainian governments were poised to sign a framework deal for the US to share in Ukraine’s mineral resources, but the meeting between President Trump and President Zelensky ended in disarray and no agreements were signed. We suspect the conversation will be broached again at a later date.
Ukrainian President Zelensky first proposed a mineral deal in late 2024, indicating the two countries could cooperate to develop $10-12 trillion of critical minerals and rare earth elements, while also helping the US diversify critical minerals and rare earth supply away from China and Russia.
Ukraine’s critical role in global mineral supplies
Ukraine produces numerous critical materials and minerals including copper, graphite, manganese, gallium, germanium, magnesium, titanium, uranium and zirconium. Ukraine is one of the world’s largest producers of manganese ore, titanium ore and titanium sponge. Ukraine also has lithium deposits, but we understand these are not in production.
Earlier this month, President Zelensky rejected the US’ initial proposal that was made in response to Zelensky’s original proposal, citing concerns that the proposal did not include security guarantees for the Ukraine. The exact details of the new deal remain unclear, with both security guarantees and financial benefits still not settled. If the deal is agreed in future negotiations, we would expect to see the US continue to support the Ukraine, if only to protect the development of shared critical mineral and rare earth resources, with the agreement also extending to oil and gas resources.
Executive order on copper imports
In addition to the negotiations around Ukraine’s minerals, President Trump also signed an executive order launching an investigation into copper imports. A Section 232 investigation will be launched to assess national security risks from the US’ increasing dependence on imported copper and the potential need for trade remedies to safeguard the domestic industry. The order highlights copper’s essential material status and its vital role in defense applications, infrastructure and emerging technologies including clean energy, electric vehicles and advanced electronics. Copper is the second most utilized material by the Department of Defense.
As in other critical minerals and critical materials markets, China holds a majority the market, with over 50% of global smelting capacity. Although copper is not on the US Department of Energy’s (DOE) critical mineral list, it is on the DOE’s list of critical materials for energy, also known as “the electric eighteen.”
The temporarily suspended US tariffs against Canada and Mexico started on Tuesday March 4. As we publish, President Trump has confirmed that the comprehensive 25% tariffs against US imports from Mexico and 10% tariffs on US imports of energy and energy products from Canada and 25% tariffs on all other imports from Canada will be imposed on March 4. The US auto sector remains vulnerable in this tariff conflict, as highlighted in previous analysis. In addition, the US will impose an additional 10% tariff of imports from China, following the 10% tariff imposed in early February. All three targeted countries have announced retaliatory trade actions against the US.
While President Trump’s actions may be quite different from past presidential administration approaches, it is clear throughout recent executive orders and Trump’s actions that protecting critical mineral and critical material supplies, both domestically and abroad, are a primary concern of the administration. The support we are seeing for both critical battery raw materials and electric vehicles so far is largely a positive development for the sector, although struggles will increase for US automakers with the Canada and Mexico tariffs.
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