Jakarta, INTI - Finance ministers from the Group of Seven (G7) agreed to swiftly reduce excessive reliance on China for critical minerals, including rare earth elements.
The agreement was reached during a G7 finance ministers’ meeting held in Washington on Monday, January 12, 2026.
The meeting was chaired by US Treasury Secretary Scott Bessent and was also attended by representatives from non-G7 countries such as Australia, India, and South Korea.
Japan’s Finance Minister Satsuki Katayama briefed the public on the outcomes of the meeting after the session concluded.
The U.S. Treasury Department stated that participants “expressed a strong shared desire to swiftly address key vulnerabilities in critical mineral supply chains.”
China’s Dominance and Geopolitical Risks
The meeting was held amid growing concerns over China’s use of its dominance in rare earth processing as a tool for diplomatic and economic influence.
During the forum, Japan’s finance minister outlined the country’s position on China’s export controls to her counterparts.
Japan also shared lessons learned from its experience dealing with China’s rare earth export restrictions in 2010.
China was reported to have targeted Japan following remarks made by Japanese Prime Minister Sanae Takaichi in parliament in November regarding a potential Japanese response in the event of an attack on Taiwan.
In the previous week, China tightened export controls on Japan covering dual-use goods that could be used for both civilian and military purposes.
The controlled items include commodities that potentially encompass rare earth metals.
China is known to account for roughly 70 percent of global rare earth mining and around 90 percent of worldwide raw material refining.
Rare earth elements play a strategic role in the production of advanced technology products as well as in the defense sector.
G7 Strategy and Mineral Diversification
In the previous year, China restricted rare earth exports to the United States as part of its trade negotiation strategy with the administration of President Donald Trump.
A meeting between U.S. President Donald Trump and Chinese President Xi Jinping in South Korea in late October resulted in the easing of several trade policies.
One outcome of the meeting was Beijing’s agreement to suspend the expansion of rare earth export controls for a period of one year.
As a collective effort to reduce risks to economic security, the G7 has developed a medium-term cooperation framework.
The plan includes monitoring potential shortages of critical minerals and coordinating responses to deliberate market disruptions.
Under the initiative, the G7 and its partners agreed to diversify sources of critical minerals.
Diversification efforts will be pursued by reshoring mining, processing, manufacturing, and recycling activities for critical minerals within their respective countries.
Conclusion
The G7’ move to cut dependence on China signals a broader shift toward a more cautious and politically driven approach to global supply chains. Beyond securing access to critical minerals, the strategy reflects growing efforts to balance economic interests with geopolitical considerations, potentially reshaping trade relationships and investment flows in the years ahead.
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