What is the critical minerals trade bloc and why does it matter for Japan?

It is a US-led effort to coordinate sourcing, pricing, and stockpiles for key inputs used in EVs, batteries, and electronics. The proposal includes Project Vault and discussion of a US price floor. For Japan, it can reduce dependency on China, stabilize investment, and reshape contract terms. It may also re-price delivered costs and affect capex plans across automakers, battery suppliers, magnet makers, and trading houses.

How could a US price floor affect costs and contracts for Japanese companies?

A US price floor could reduce price collapses that stall new mines, but it may lift near-term procurement costs for certain minerals. Companies may respond with longer tenors, take-or-pay clauses, and diversified offtakes. Inventory buffers and coordination with public stockpiles could smooth supply. Net effects will differ by exposure to rare earth supply, lithium, and nickel, and by the strength of yen hedging and pass-through power.

What forms might the China response take, and what are the portfolio risks?

China could tighten export permits, impose technology controls, or apply non-tariff measures around processing and inspections. That would raise lead times and uncertainty for firms reliant on China-based refining. Portfolio risks include margin pressure for upstream and midstream names and delivery delays. Offsetting moves involve multi-region sourcing, deeper inventories, recycling investments, and selective hedges while policy details of the bloc and Project Vault are clarified.

Which Japan-listed sectors could benefit or face pressure under this framework?

Potential beneficiaries include diversified trading houses, logistics providers, battery material refiners, magnet makers, and recyclers with multi-region access. Firms with strong pricing power and flexible contracts can defend margins. Likely pressure points include single-source refiners, processors concentrated in China, and cost-sensitive manufacturers with weak pass-through. Monitoring USTR guidance, METI updates, and company disclosures on offtakes and stockpile strategies will be key for timing allocation shifts.

Global Market Insights

Critical Minerals Trade Bloc Faces China Pushback on February 6

ByHuzaifa Zahoor February 5, 2026February 5, 2026

On February 6, the United States gathered 55 countries to discuss a critical minerals trade bloc designed to cut reliance on China. Plans include a minimum price framework, a government-backed stockpile called Project Vault, and near-term policy guidance from USTR. For Japan, this could re-price inputs across EVs, batteries, and electronics, while reshaping long-term contracts. We explain what this means for rare earth supply, how a US price floor might work, and how to position portfolios amid a fast-moving China response. Investors should watch procurement, capex, and yen-sensitive cost structures.