Underscoring the global need for raw materials, Canada, the US, the UK, the EU and Australia have all established critical minerals lists aimed at streamlining and expediting projects up and down the supply chain.
Reducing reliance on powerhouse critical minerals producer China is a key goal, but as the Trump administration focuses on tariffs and domestic production, it is threatening to disrupt fragile ex-China supply chains.
During a policy outlook panel at this year’s Toronto-based Benchmark Summit, Gracelin Baskaran, director of critical minerals security at the Center for Strategic and International Studies, and Morgan Bazilian, professor at the Colorado School of Mines, discussed the global implications of US tariffs, honing in on critical minerals.
Although inflation is the most obvious consequence of widespread tariffs, Baskaran pointed to longer-term effects.
“We have a tendency in policy to think about the consequence of tariffs being inflation in the short to medium term,’ she commented. “But I think the bigger thing is it also undermines the development of domestic industry.”
Using uranium and the nuclear fuel cycle as an example, Baskaran explained to the audience that tariffs would disincentivize the growth of the domestic nuclear fuel supply chain in the US. In her view, a tariff on uranium would lead to a 2 percent increase in electricity costs, which would have a ripple effect across the supply chain.
“The biggest problem is we’re building our enrichment capabilities in the US, and we need to incentivize sending raw uranium to the US for enrichment. And it undermines that effort, because it’s now 25 percent more expensive,” she said.
As the US pushes for domestic reindustrialization and stronger internal supply chains, tariffs are making it harder to secure critical resources needed for midstream processing — an already unprofitable sector.
While the impact may seem short term, failing to develop a sustainable domestic industry could have lasting consequences, affecting US manufacturing and resource independence for decades, she added.
Copper tariff investigation boosts prices
Deemed essential for widespread electrification, copper is listed on all critical minerals lists.
The US produced 1.1 million metric tons of copper and 890,000 metric tons of refined copper in 2024. However, according to the US Geological Survey, the country also imported 810,000 metric tons of refined copper last year.
In late February, the Trump administration launched a Section 232 investigation into copper imports.
It’s been described by Peter Navarro, trade adviser for the White House, as a move to curb China’s expanding copper sector while addressing vulnerabilities in the US supply chain.
Navarro has stressed the need to restore domestic mining, smelting and refining of copper, citing military and technological applications. News of the investigation and concerns about potential tariffs targeting the sector pushed have copper prices over 9 percent higher, from US$4.50 per pound on February 27 to US$4.94 on March 17.
As Bazilian pointed out, the rise has come in part due to tariff speculation, which has been reflected in a price discrepancy between copper trading on the COMEX and London Metal Exchange.
“You know that delta has increased, so the markets have already priced in the tariffs. That’s what it should be doing,” he said, noting that the markets for some minor metals lack similar mechanisms.
“The minor metals have no such price transparency or discovery,” he noted. ‘But if you have robust markets, they can be a really good bolster against what will always be a rapidly changing and uncertain political landscape.”
Critical minerals deals in jeopardy
Aside from the added costs tariffs are expected create, they are doing damage to the friendly, decades-long relationship between Canada and the US, and concerns about joint projects are coming to the forefront.
In December, the US Department of Defense (DoD) earmarked US$15.8 million to help advance a tungsten project in the Yukon. The deal, which also included C$12.9 million from the Canadian government, was hailed as “close collaboration among like-minded partners” aimed at unlocking critical minerals development.
It is part of the larger US-Canadian Joint Action Plan on Critical Minerals.
‘Tungsten is used in a diverse set of DoD systems and is essential to national security,’ Dr. Laura Taylor-Kale, assistant secretary of defense for industrial base policy, said in a press release.
‘The United States is overly reliant on overseas sources of tungsten and a secure North American supply for this commodity will mitigate one of our most critical material risks. This award also highlights the importance of the Department’s partnership with our Canadian allies,’ Taylor-Kale continued.
Bazilian said while government investment is important, it’s not sufficient and in this case has become uncertain.
“There’s been investment in Canada by the Pentagon. I’m not sure that will continue,” he said.
“We have to look at financial mechanisms that help investors look at demand — (they need) some kind of certainty on the demand side, whether it’s an offtake agreement or something else. That’s not going to come from the DoD — while the US DoD is massive, it’s not big enough to to provide all of that downstream,” Bazilian emphasized.
The professor also noted that unclear capital structures and limited access to funds are creating challenges for investment, and without both supply and demand certainty, securing financing will remain difficult.
Securities Disclosure: I, Georgia Williams, hold no direct investment interest in any company mentioned in this article.