It’s too early to tell how the bill, if passed, could align with the White House’s policy, but whatever the approach, the U.S. is in a crunch to drastically reduce its reliance on China, after Beijing used its dominance of the critical minerals market to gain leverage in the trade war with Washington. President Donald Trump and Chinese President Xi Jinping agreed to a one-year truce in October, by which Beijing would continue to export critical minerals while the U.S. would ease its export controls of U.S. technology on China.

The Pentagon has shelled out nearly $5 billion over the past year to help ensure its access to the materials after the trade war laid bare just how beholden the U.S. is to China, which processes more than 90% of the world’s critical minerals. To break Beijing’s chokehold, the U.S. government is taking equity stakes in a handful of critical mineral companies and in some cases guaranteeing the price of some commodities using an approach that seems more likely to come out of China’s playbook instead of a Republican administration.

The bill that Sen. Jeanne Shaheen, D-N.H., and Sen. Todd Young, R-Ind., introduced Thursday would favor a more market-based approach by setting up the independent body charged with building a stockpile of critical minerals and related products, stabilizing prices, and encouraging domestic and allied production to help ensure stable supply not only for the military but also the broader economy and manufacturers.

Shaheen called the legislation “a historic investment” to make the U.S. economy more resilient against China’s dominance that she said has left the U.S. vulnerable to economic coercion. Young said creating the new reserve is “a much-needed, aggressive step to protect our national and economic security.”

New sense of urgency

When Trump imposed widespread tariffs last spring, Beijing fought back not only with tit-for-tat tariffs but severe restrictions on the export of critical minerals, forcing Washington to back down and eventually agree to the truce when the leaders met in South Korea.

On Monday, in his speech at SpaceX, Defense Secretary Pete Hegseth revealed that the Pentagon has in the past five months alone “deployed over $4.5 billion in capital commitments” to close six critical minerals deals that will “help free the United States from market manipulation.”

One of the deals involves a $150 million of preferred equity by the Pentagon in Atlantic Alumina Co. to save the country’s last alumina refinery and build its first large-scale gallium production facility in Louisiana.

Last year, the Pentagon announced it would buy $400 million of preferred stock in MP Materials, which owns the country’s only operational rare earths mine at Mountain Pass, California, and entered into a $1.4-billion joint partnership with ReElement Technologies Corp. to build up a domestic supply chain for rare earth magnets.

The drastic move by the U.S. government to take equity stakes has prompted some analysts to observe that Washington is pivoting to some form of state capitalism to compete with Beijing.

“Despite the dangers of political interference, the strategic logic is compelling,” wrote Elly Rostoum, a senior fellow at the Washington-based research institute Center for European Policy Analysis. She suggested that the new model could be “a prudent way for the U.S. to ensure strategic autonomy and industrial sovereignty.”

But companies across the industry are welcoming the intervention from Trump’s administration.

“He is playing three-dimensional chess on critical minerals like no previous president has done. It’s about time too, given the military and strategic vulnerability we face by having to import so many of these fundamental building blocks of technology and national defense,” NioCorp’s Chief Communications Officer Jim Sims said. That company is trying to finish raising the money it needs to build a mine in southeast Nebraska.

Relying on allies for help

In addition to trying to boost domestic production, the Trump administration has sought to secure some of these crucial elements through allies. In October, Trump signed an $8.5 billion agreement with Australia to invest in mining there, and the president is now aggressively trying to take over Greenland in the hope of being able to one day extract rare earths from there.

On Monday, finance ministers from the G7 nations huddled in Washington over their vulnerability in the critical mineral supply chains.

U.S. Treasury Secretary Scott Bessent, who has led several rounds of trade negotiations with Beijing, urged attendees to increase their supply chain resiliency and thanked them for their willingness to work together “toward decisive action and lasting solutions,” according to a Treasury statement.

The bill introduced on Thursday by Shaheen and Young would encourage production with both domestic and allied producers.

Past efforts to bolster rare earths production

Congress in the past several years has pushed for legislation to protect the U.S. military and civilian industry from Beijing’s chokehold. The issue became a pressing concern every time China turned to its proven tactics of either restricting the supply or turned to dumping extra critical minerals on the market to depress prices and drive any potential competitors out of business.

The Biden administration sought to increase demand for critical minerals domestically by pushing for more electric vehicle and windmill production. But the Trump administration largely eliminated the incentives for those products and instead chose to focus on increasing critical minerals production directly.

Most of those past efforts were on a much more limited scale than what the government has done in the past year, and they were largely abandoned after China relented and eased access to critical minerals.

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Funk reported from Omaha, Nebraska. AP writer Konstantin Toropin contributed to the report.

Danish Foreign Minister Lars Løkke Rasmussen said after a meeting in Washington on Wednesday with his Greenlandic counterpart, U.S. President JD Vance and Secretary of State Marco Rubio that a “fundamental disagreement” remained. He acknowledged that “we didn’t manage to change the American position” but said he hadn’t expected to.

However, Wednesday’s events did point to ways ahead.

Searching for a compromise

Denmark, Greenland and the U.S. agreed to form a high-level working group “to explore if we can find a common way forward,” Løkke Rasmussen said. He added that he expects the group to hold its first meeting “within a matter of weeks.”

Danish and Greenlandic officials didn’t specify who would be part of the group or give other details. Løkke Rasmussen said the group should focus on how to address U.S. security concerns while respecting Denmark’s “red lines.” The two countries are NATO allies.

“Whether that is doable, I don’t know,” he added, holding out hope that the exercise could “take down the temperature.”

He wouldn’t elaborate on what a compromise might look like, and expectations are low. As Danish Defense Minister Troels Lund Poulsen put it Thursday, having the group is better than having no working group and “it’s a step in the right direction.” It will at least allow the two sides to talk with each other rather than about each other.

Trump has argued repeatedly that the U.S. needs control of Greenland for its national security. He has sought to justify his calls for a U.S. takeover by repeatedly claiming that China and Russia have their own designs on Greenland, which holds vast untapped reserves of critical minerals.

Sending a military signal

Just as the talks were taking place in Washington on Wednesday, the Danish Defense Ministry announced that it was increasing its military presence in Greenland, along with NATO allies. France, Germany, Norway and Sweden announced that they were each sending very small numbers of troops in a symbolic but pointed move signaling solidarity with Copenhagen.

The U.K. said one British officer was part of what it called a reconnaissance group for an Arctic endurance exercise. The German Defense Ministry, which dispatched 13 troops, said the aim is to sound out “possibilities to ensure security with a view to Russian and Chinese threats in the Arctic.” It said it was sending them on a joint flight from Denmark as “a strong signal of our unity.”

Poulsen said that “the Danish Armed Forces, together with a number of Arctic and European allies, will explore in the coming weeks how an increased presence and exercise activity in the Arctic can be implemented in practice,” he said.

On Thursday, he said the intention was “to establish a more permanent military presence with a larger Danish contribution,” and to invite allies to take part in exercises and training on a rotating basis, according to Danish broadcaster DR.

While the European troops are largely symbolic at this point, the timing was no accident.

The deployment “serves both to send a political signal and military signal to America, but also indeed to recognize that Arctic security should be reinforced more,” said Maria Martisiute, an analyst at the European Policy Center in Brussels. “And first and foremost, this should be done through allied effort, not by the U.S. coming and wanting to take it over. So it complicates the situation for the U.S.”

Talking to NATO

The European efforts are Danish-led and not coordinated through NATO, which is dominated by the United States. But the European allies are keen to keep NATO in play, and Germany said that “the aim is to obtain a well-founded picture on the ground for further talks and planning within NATO.”

Poulsen has said he and Greenland’s foreign minister plan to meet NATO Secretary General Mark Rutte in Brussels on Monday to discuss security in and around the Arctic. NATO has been studying ways to bolster security in the Arctic region.

“I’m really looking forward for an announcement of some kind of military activity or deployment under NATO’s framework,” Martisiute said. “Otherwise there is indeed a risk that … NATO is paralyzed and that would not be good.”

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Sylvain Plazy in Brussels contributed to this report.

But against a starkly different geopolitical background and tough odds — including backlash from powerful protectionist lobbies — the EU and the South American alliance known as Mercosur are expected to formally sign their quarter-century-in-the-making trade pact this Saturday at a ceremony in Paraguay.

This is the first major trade agreement for Mercosur, which includes the region’s two biggest economies, Brazil and Argentina, along with Paraguay and Uruguay. Bolivia, the newest member, was not involved in negotiations but can join the agreement in the coming years.

The trans-Atlantic trade deal — lifting tariffs on products ranging from Argentine steaks and Brazilian copper to German cars and Italian wine — still has to be ratified by the European Parliament.

The significance of creating one of the world’s largest free-trade zones — home to more than 700 million people and accounting for a quarter of global gross domestic product — while President Donald Trump yanks the United States out of the international economy is not lost on the signatories.

For once, it’s not about Trump vs. China

European Commission President Ursula von der Leyen hailed the deal last week as a powerful endorsement of multilateralism “in the face of an increasingly hostile and transactional world.” Brazilian President Luiz Inácio Lula da Silva, 80, called it a rare “victory for dialogue, negotiation and the bet on cooperation.”

That victory comes at the expense of the U.S. and China, experts say, as Trump aggressively asserts American authority in the resource-rich region and Beijing uses its massive trade and loans to build influence.

“It’s a signal that South American economies are seeking to hedge away from this great power competition between the U.S. and China,” said Lee Schlenker, a research associate with the Global South program at the Quincy Institute for Responsible Statecraft, a Washington think tank.

“It shows that South America can continue to flex its muscles in the international sphere, to diversify its trade partners and exert a certain level of autonomy it’s often denied.”

South American ranchers rejoice

The accord grants South American nations, renowned for their fertile land and skilled farmers, increased access at a preferential tax rate to Europe’s vast market for agricultural goods.

Here in Argentina, exporters reckon they’ll save tens of millions of dollars a year thanks to the deal’s immediate elimination of a 20% tariff on the EU’s long-standing quota scheme for high-quality meat imports.

It’s a breakthrough for Argentina, a nation dominated for decades by left-leaning populist governments that kept the economy closed to the outside world and prioritized the domestic market to the extent of imposing taxes on farm exports to keep food prices down.

“We’re in the midst of a paradigm shift here,” said Carlos Colombo, the president of Cañuelas Cattle Market in Buenos Aires province where over 12,000 cattle are sold daily, many destined for Europe and China. “Argentina has reopened itself to the world.”

Argentine President Javier Milei may be Trump’s strongest ideological ally in Latin America — sharing his disdain for the United Nations and the Paris climate accord — but no one can call the radical libertarian a protectionist.

At first he derided the notoriously slow-moving Mercosur as irrelevant and threatened to ditch it. But he changed his tune since realizing the bloc’s potential to sweep away tariffs and slash customs red tape.

“He sees this agreement as a way to revitalize and re-signify Mercosur,” said Marcelo Elizondo, an Argentine economic analyst specializing in international trade.

The free-trade fever has also infected Brazil’s long-closed economy. Apex, a Brazilian government investment agency, estimates that EU-bound agricultural exports like instant coffee, poultry and orange juice will rake in $7 billion in coming years.

Europe’s farmer lobby wins concessions

Squeezed by environmental regulations and fearing a flood of cheap food products from across the Atlantic, farmers have blocked highways and descended on the streets of European capitals in an explosion of outrage against the agreement.

The EU has scrambled to soothe their concerns over decades of negotiations, adding environmental and animal welfare safeguards to the accord and imposing strict quotas for South American exports of meat and sugar to ensure homegrown produce stays competitive.

Even so, the angry farmers ultimately persuaded France, Poland and a few other states to oppose the deal in last week’s internal EU vote, depriving the accord’s supporters of what they hoped would be a show of unity. Italy and other agricultural powerhouses only came around after the EU offered farmers generous subsidies to the tune of $52 billion.

“It’s a sizable bribe,” said Jacob Funk Kirkegaard, nonresident senior fellow at the Peterson Institute for International Economics. “EU leaders decided that the deal is so important at this moment, it’s worth it.”

‘Cows for cars’

Some have dubbed the deal “cows for cars,” reflecting the perception that Europe’s auto industry will also win big.

Clobbered by growing competition with China and sky-high U.S. tariffs, vaunted German auto giants like Volkswagen and BMW are glad for the boost, as are producers in Europe’s pharmaceutical, construction and machinery sectors gaining access to hundreds of millions more consumers.

Experts say that the elimination of 35% tariffs on auto parts and cars gives European industrial exporters a rare chance to claw back their South American market share from cheaper Chinese rivals.

“Failing to sign the EU-Mercosur free trade agreement risked pushing Latin American economies closer to Beijing’s orbit,” said Agathe Demarais, a senior policy fellow with the European Council on Foreign Relations.

But many are still are holding their breath, having watched negotiations lumber along for years only to trip up at the last minute.

“There are still several steps that have to be taken … and Europe continues to be very careful,” Colombo said, straining to be heard over the hollers of cowboys prodding hundreds of bellowing cattle into trucks.

“Let’s not forget, this is historic. We’ve never reached an agreement like this before.”

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Associated Press writer Mauricio Savarese in Sao Paulo contributed to this report.