Jacob Helberg, Senior Policy Advisor to the U.S. State Department (left) [AFP Yonhap News]

A senior U.S. government official stated on the 17th (local time) that the United States, which is pushing to form a critical minerals trade bloc to counter China’s weaponization of rare earth export controls, has developed a price floor system for critical minerals.

Jacob Helberg, Senior Policy Advisor to the Under Secretary for Economic Growth, Energy, and the Environment at the U.S. Department of State, said in an interview with Bloomberg that day, "Multiple (U.S.) government agencies have developed a very, very sophisticated price floor system (for critical minerals)," adding, "We are currently in discussions with our allies and partners."

Previously, the U.S. held a ministerial-level meeting on critical minerals on the 4th, with over 50 countries participating, to officially formalize the concept of a critical minerals trade bloc.

The strategy is to reduce dependence on China by restructuring supply chains around allies and partner nations, following the vulnerabilities exposed during the U.S.-China tariff conflict last year, which were highlighted by China's export controls on rare earths.

The core of this strategy is setting a minimum price level within the trade bloc. The idea is to create a multilateral trade system that guarantees a certain price to break the vicious cycle where overproduction and low-price offensives lead to the failure of new mine developments or projects.

The South Korean government is currently in the stage of reviewing whether to join the U.S.-led critical minerals trade bloc.

While the diversification of critical mineral supply chains is necessary and participating in an initiative led by the U.S., an ally, may seem natural, concerns remain. These include the potential for increased cost burdens on key industries such as semiconductors, batteries, and electric vehicles if price floors are implemented as proposed, as well as the risk of retaliation from China.