Finance ministers from G7 nations and allies met in Washington to agree on swift measures to diversify rare earth supply chains amid China's export restrictions to Japan. The discussions highlighted concerns over Beijing's dominance in critical minerals essential for technology and defense. Proposals included setting price floors and fostering new partnerships.
On January 12, 2026, finance ministers from the G7 nations— the U.K., Canada, France, Germany, Italy, Japan, the United States—and the European Union gathered in Washington, hosted by U.S. Treasury Secretary Scott Bessent. Officials from Australia, Mexico, South Korea, and India also joined to discuss vulnerabilities in rare earth supply chains dominated by China.
Beijing has intensified pressure on Japan since Prime Minister Sanae Takaichi's November 2025 remarks on a potential Taiwan contingency. Last week, China banned exports of dual-use goods to Japan's military, including some critical minerals. Japanese Finance Minister Satsuki Katayama protested strongly to China at the meeting and urged lifting the restrictions. Speaking to reporters afterward, she said Japan had secured understanding from participants on efforts to "speedily lower dependence on China for rare earth supplies."
Bessent posted on X, formerly Twitter: "I was pleased to hear a strong, shared desire to quickly address key vulnerabilities in critical minerals supply chains." According to the International Energy Agency, China refines 47% to 87% of copper, lithium, cobalt, graphite, and rare earths, while the participating countries and the EU account for 60% of global demand. These minerals are vital for defense technologies, semiconductors, renewable energy, batteries, and refining.
German Finance Minister Lars Klingbeil noted discussions on potential price floors for rare earths and partnerships to boost alternative supplies, but emphasized that talks are preliminary with many issues unresolved. He said the topic would be central under France's G7 presidency this year. Warning against an anti-China coalition, Klingbeil stressed Europe's need to act independently: "What is very important to me is that we in Europe do not sit back... We have to become active." He called for more EU-level financing, citing a new German raw materials fund, and urged progress on recycling to reduce dependencies.
No joint statement was issued. Katayama outlined short-, medium-, and long-term approaches, including markets based on labor and human rights standards, public financial support, tax incentives, trade measures, and minimum pricing. She stressed committing to these tools.
