G7 Nations and Partners Seek Coordinated Price Floor to Counter China's Critical Mineral Grip

Finance ministers from the Group of Seven (G7) nations and key partners convened in Washington on Monday, January 12, 2026, to develop concrete, market-interventionist strategies aimed at reducing global reliance on the People's Republic of China for critical minerals, particularly rare earth elements. The meeting, hosted by U.S. Treasury Secretary Scott K.H. Bessent, included officials from the G7 members—Japan, Britain, France, Germany, Italy, Canada, and the U.S.—alongside representatives from Australia, Mexico, South Korea, and India. These participating countries, along with the European Union, represent approximately 60% of the world's demand for strategic resources essential for defense systems, semiconductors, and green energy technologies.

The central proposal under discussion was the establishment of a coordinated rare-earths price floor, a mechanism designed to ensure the economic viability of non-Chinese mineral production and refining operations against what participants view as state-subsidized output from Beijing. This gathering marks a shift from general dialogue toward implementing direct financial tools to de-risk supply chains, a movement accelerated by recent geopolitical tensions, including Chinese export controls on Japanese dual-use items earlier in January 2026.

Japanese Finance Minister Satsuki Katayama presented a comprehensive policy framework emphasizing short-, medium-, and long-term actions, which reportedly received broad agreement. Her proposals included establishing markets based on standards such as respect for labor conditions and human rights, supported by a suite of policy instruments: public financial support, tax incentives, trade measures, and the proposed minimum price setting. U.S. Treasury Secretary Bessent advocated for "prudent de-risking over decoupling" from China, emphasizing the immediate need to correct supply chain deficiencies that are highly concentrated and susceptible to disruption.

Data from the International Energy Agency indicates that China maintains refining capacities between 47% and 87% across key minerals such as lithium, cobalt, graphite, and rare earths, solidifying its leverage over global supply. Despite the urgency, consensus on the more aggressive market interventions remains challenging, as no joint statement was issued following the Washington meeting. German Finance Minister Lars Klingbeil confirmed the price floor was discussed but noted that unresolved issues require further deliberation among foreign and energy ministers, cautioning against forming an explicit anti-China coalition while stressing the necessity for Europe to accelerate domestic supply development.

The context for these discussions is informed by historical precedent, notably China's 2010 abrupt cutoff of rare earth exports to Japan, which prompted Tokyo to reduce its import dependency from 90% to 58% through strategic policy adjustments. As France currently holds the G7 presidency, security concerning critical minerals is expected to remain a central focus throughout the year.