Key Takeaways:

- The United States is reengineering global supply chains to restore strategic autonomy, replacing market-led globalization with a state–private framework.
- This new order rests on three pillars: containment (curbing China-linked dependence), co-production (integrating allies like Australia, Japan, and Korea), and co-ownership (direct U.S. state investment in critical sectors).
- The result is a bifurcated world economy, split between American-led networks of trusted partners and China’s state-driven manufacturing sphere.

Over the past decade, the global economy has been defined by structural interdependence. Supply networks have placed the main suppliers of manufactured goods and critical materials outside the United States, while American firms have led in software, design, and frontier technologies. As geopolitical competition intensified across the South China Sea, the Middle East, and Ukraine- Russia, Washington began moving to reduce this dependence and restore control over the physical foundations of advanced value creation.

This article examines how the United States has actively reorganized the global critical resources supply chain as part of a broader effort to secure strategic autonomy and rebuild economic leverage. Within this context, the Trump administration advanced an American-led, state–private strategic framework that redefined trade and policy instruments as levers of power. This framework operates through three interlocking pillars. The first is containment, a system of regulatory and investment controls that uses export restrictions, compliance risk, and selective tariffs to steer value creation away from Chinese networks. The second is co-production, which integrates allied partners such as Australia, Canada, Japan, and Korea into shared extraction, refining, and manufacturing systems through joint financing, defense procurement, and coordinated policy. The third is co-ownership, a model of state participation in strategic sectors through equity investment, procurement guarantees, and hybrid public–private institutions. These mechanisms mark a structural transformation in the global economy, as the United States government, long deferential to private sector globalization, now reasserts authority over the strategic organization of value creation and supply. The outcome is the gradual emergence of two economic worlds, one anchored in American institutions, public and private finance, and allied cooperation, and another centered on China’s state-directed manufacturing and resource networks.

The first pillar is containment. Through Section 301 of the Trade Act of 1974, the United States targets unfair foreign trade practices, while Section 232 of the Trade Expansion Act of 1962 authorizes restrictions on imports that threaten national security. These provisions allow Washington to treat trade dependence itself as a strategic vulnerability, creating the legal foundation for a wider strategy of containment. Under the Trump administration, these authorities were transformed from routine trade enforcement tools into instruments of national strategy. Building on this foundation, the United States used Section 301 actions to impose tariffs on hundreds of billions of dollars in Chinese goods and extended the approach to cover minerals and technology inputs considered essential to advanced industry. Tariffs on items such as graphite, permanent magnets, and tungsten served less as market corrections than as strategic signals, warning firms that reliance on China-linked production carried regulatory and geopolitical risk. Most raw and refined critical minerals, however, remained exempt due to U.S. dependence. The result was a managed reorganization of value creation in which inputs refined or assembled in China were treated as strategic liabilities, pushing firms to redirect supply chains toward allied and domestic systems.

The quantitative scope of these measures underscores their impact. Between 2018 and 2025, the number of Chinese entities added annually to the Entity List increased markedly, encompassing semiconductor firms such as SMIC, YMTC, and CXMT, as well as equipment manufacturers like Naura and AMEC. U.S. semiconductor exports to China have fluctuated but generally declined in high-end categories subject to license controls, while imports of certain critical minerals have begun to shift toward alternative suppliers. U.S. firms’ investment in China’s manufacturing sector has declined materially since 2019. On September 29, 2025, the Bureau of Industry and Security introduced the Affiliates Rule, extending Entity List and Military End-User restrictions to any company that is 50 percent or more owned by a listed entity. The rule obliges exporters to perform ownership-chain due diligence and imposes license requirements on indirect subsidiaries and affiliates, closing loopholes that previously allowed Chinese firms to obtain restricted technologies through third-country intermediaries. On October 9, 2025, China responded with broader resource and technology controls, tightening its licensing regime for gallium, germanium, and rare-earth magnet material. These measures signaled a deepening transition from trade friction to a mutual weaponization of technological and resource interdependence.

The second pillar is allied co-production. Rather than pursuing isolation, Washington is increasingly building a networked architecture that links finance, extraction, and technology across trusted partners. This has resulted in, for instance, Lynas’s rare earth separation plant in Texas, financed by the United States Department of Defense under Title III of the Defense Production Act, which exemplifies this model of co-production: extraction in Australia, processing in the United States, and shared offtake guarantees between both governments. On October 20, 2025, the United States and Australia announced a new critical minerals framework that commits each side to mobilize at least one billion dollars in near-term financing and sets a coordinated framework for mining, separation, processing, and offtake, alongside more than two billion dollars in EXIM Bank Letters of Interest. Other initiatives include the United States–Canada Critical Minerals Action Plan, which integrates upstream and midstream value creation of nickel, cobalt, and graphite, creating a continental bloc whose regulatory and financial systems are interoperable.

In East Asia, Japan and Korea have joined this alignment through projects such as POSCO Holdings’ partnership with General Motors to build a cathode materials facility in Quebec and the Japan Organization for Metals and Energy Security’s co-financing of rare earth ventures in Vietnam and recycling facilities in Malaysia. Korea’s role is becoming especially salient: it chairs the Minerals Security Partnership as of July 2024, and Korean firms are committing major investments to United States-linked battery and materials supply chains. One example of this initiative is the BEACONS project in Texas, a Department of Defense-funded consortium that develops and tests next-generation battery prototypes using allied-sourced critical minerals and U.S.-manufactured components. The program links the University of Texas at Dallas and Argonne National Laboratory with private sector partners, including Korean and Japanese firms engaged in cathode, anode, and precursor development. BEACONS has also partly given birth to Lyvi, a United States startup developing artificial intelligence systems to trace and analyze global supply chains, extending the project’s mission into the commercial sphere.

The third pillar is direct state co-investment. Federal institutions have moved beyond simple incentives toward equity, loans with strategic covenants, and long-term procurement commitments in critical materials. MP Materials, which operates the Mountain Pass rare earth mine, received a combined package in July 2025 that included a $150 million loan from the Office of Strategic Capital, a $400 million preferred equity purchase by the Department of Defense, and a long-term purchase commitment of roughly 7,000 metric tons of magnets per year for ten years. In October 2025, the federal government announced a ten percent equity stake in Trilogy Metals, along with additional warrants for approximately seven and one-half percent, to accelerate development of the Ambler district in Alaska, which contains copper and zinc along with associated critical elements. In the same month, the United States Export-Import Bank considered a $120 million financing package for a U.S. firm operating in Greenland to develop rare earth and critical mineral extraction, signaling Washington’s intent to project financial power into emerging Arctic resource corridors.

For lithium, the Department of Energy’s Loan Programs Office closed a $2.26 billion loan for Lithium Americas’ Thacker Pass project in 2024 and began disbursing funds in 2025. On September 30, 2025, DOE restructured the deal to include warrant-based equity participation equal to about five percent of the company, with additional rights tied to the project entity. In 2025, the Department of Energy’s Loan Programs Office authorized over ten billion dollars in new loan commitments for critical-mineral, battery, and energy-infrastructure projects, while the Office of Strategic Capital began deploying newly authorized credit tools across the minerals, semiconductor, and advanced-materials sectors, marking the federal government’s re-emergence as a direct strategic co-investor. These transactions are coordinated through a growing constellation of public and public–private bodies, overseen by the Department of Defense and the White House.

In sum, these three pillars of containment, co-production, and co-ownership mark the consolidation of an American-led, state–private strategic framework that reorganizes globalization around managed value creation and geopolitical alignment. Containment deters reliance on adversarial systems, co-production embeds partners within shared value frameworks, and state co-investment secures control over strategic sectors. The result is a bifurcated global economy organized around two economic spheres: one governed by U.S. capital, regulation, and security institutions, and another centered on China’s state-directed manufacturing and resource networks.