House Foreign Affairs subcommittee presses finance, trade and diplomatic tools to reduce U.S. reliance on China for critical minerals

At a hearing of the House Foreign Affairs Committee’s Subcommittee on East Asia and the Pacific, lawmakers and former officials urged a coordinated international and domestic strategy to reduce U.S. and allied dependence on the People’s Republic of China for critical minerals used in semiconductors, electric-vehicle batteries and defense systems.

The session, titled “Breaking China’s choke hold on critical mineral supply chains,” centered on financing tools, trade measures and multinational partnerships to build non‑Chinese sources and to derisk private investment. Chairwoman Kim opened the hearing saying the United States needs “a bold global strategy to secure resilient, diversified supply chains free from Chinese control.”

Why it matters: China currently dominates key parts of the processing and manufacturing chain for many minerals that underpin modern technology and defense systems. Witnesses said that relying only on U.S. domestic production will be too slow to meet rapidly rising global demand and that a mix of diplomatic, financing and market measures will be required.

Panelists proposed three near-term pillars to blunt Chinese market power: (1) use U.S. international finance tools such as the Development Finance Corporation and the Export-Import Bank to catalyze private investment abroad; (2) deploy domestic tools, including targeted tariffs and Defense Production Act authorities, to protect nascent U.S. and allied capacity from predatory pricing; and (3) expand multinational efforts such as the Mineral Security Partnership (MSP) to coordinate investments, transparency and recycling.

Frank Fennon, managing director of Fennon Global Advisors, said the PRC has “systematically weaponized its control over critical mineral supply chains” and urged Congress to direct financing toward projects that exclude entities with substantial Chinese ownership. "Congress should significantly increase the DFC’s funding and fix the scoring problem that treats equity investments as grants," Fennon said.

Former senator Joseph Manchin urged using the full range of U.S. tools, including the Defense Production Act, the DFC, and the Export-Import Bank, to accelerate production and protect strategic industries. "We need strong, reliable, critical mineral supply chains across the three phases — extraction, processing, and manufacturing — so that no part of the process is in the hands of an adversary," Manchin said.

Former Undersecretary Jose Fernandez described the MSP as an operational model that combines diplomatic support, information sharing and cofinancing to derisk projects. Fernandez said recycling should be part of the strategy: he cited an IEA estimate — repeated at the hearing — that recycled material could meet as much as 30% of demand in the coming decades and called for incentives and mandates to build feedstock for recycling facilities.

Members asked specific questions about permitting, workforce and domestic feedstocks. Several speakers urged permitting reform to shorten timelines for mines and processing facilities; Manchin and others said long delays and litigation inflate costs and deter private investment. Members from coal-producing states pressed the panel on extracting rare earths and other minerals from coal waste and ash as a domestic source of material.

Trade and market measures were discussed as countermeasures to Chinese tactics of subsidized production and price manipulation. Witnesses and members proposed targeted tariffs and greater transparency requirements for provenance and labor practices. Representative Orsiuzuki raised concerns about labor and child‑labor risks in some supply chains; witnesses argued that a U.S. approach emphasizing high environmental, social and governance standards could be both ethical and commercially competitive.

The hearing also noted recent developments in public‑private coordination: witnesses highlighted the Department of Defense’s investment in MP Materials and said government offtake commitments and co-investment can unlock private capital. Members and witnesses urged that reauthorization of the DFC and other finance tools include fixes to equity scoring, expanded country eligibility, and higher investment ceilings to make U.S. financing competitive with state-backed alternatives.

The committee did not vote on legislation at the hearing. Ranking Member Barra said he had introduced a bipartisan Mineral Security Partnership Authorization Act with Chairwoman Kim and Representative Moylan to authorize the State Department’s U.S. participation in the MSP; the bill was discussed by multiple witnesses but was not acted on during the hearing.

The panel concluded with broad agreement that the problem is bipartisan and requires a mix of finance, trade, diplomacy and domestic reform. Chairwoman Kim and members said they will use the subcommittee’s oversight role to press agencies — including the State Department and the DFC — to implement an integrated strategy.