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After nearly a year waiting to meet US President Donald Trump, Australian Prime Minister Anthony Albanese sought to argue his country’s strategic value Monday – only for the “America first” leader to dominate the encounter by opining that Beijing had no plans to invade Taiwan and posed no real threat in the Indo-Pacific. “China doesn’t want to do that,” he insisted on Taiwan, during a press gaggle alongside Albanese, but later stated that the island will be one of the topics of discussion when he meets with Xi next week in South Korea. While Trump celebrated a multibillion-dollar minerals deal with Canberra aimed at curbing China’s leverage in trade talks, he also told Australia’s ambassador to Washington, former PM Kevin Rudd, that he didn’t like him and “probably never will” over past criticisms. Trump said while he viewed Aukus, a 2021 deal signed with Australia and Britain, as a deterrent against Beijing in the strategic region he didn’t think that “we are going to need it”. China has expressed strong opposition to Aukus, accusing it of violating the Nuclear Non-Proliferation Treaty as it transfers nuclear weapons to non-nuclear states. When asked if he would provide more nuclear submarines to Australia to counter China’s “bad behaviour”, Trump instead said that he thinks that “China’s been very respectful to us”. Aukus, negotiated by Trump’s predecessor, Joe Biden, has been under review by the US Department of Defence for months. The deal calls for the US to sell at least five submarines to Australia to help deter China’s growing assertiveness in the region by 2032. Just last week, Australia claimed that a Chinese fighter jet dangerously released flares too close to an Australian Air Force aircraft. “I love my relationship with President Xi,” Trump said, adding that if China threatened the US with rare earths then he will use “powerful tariffs”. However, amid escalating geopolitical competition with China – and Beijing’s sweeping new curbs on rare earths and related technologies, the US has emerged as one of the major buyers of these essential resources, which are crucial for producing everything from fighter jets and smart cars to advanced electronics. To capitalise on Trump’s appetite for critical minerals and rare earth metals and reaffirm the bilateral ties, Albanese travelled to Washington with his minister for resources, but not the foreign and defence ministers. While Trump threw his weight behind Aukus, Canberra, in return, pledged to help build an alternate supply chain for these essential inputs away from China. Trump told reporters that the US and Australia had concluded a critical mineral deal, which he claimed took about four to five months. “In about a year from now, we’ll have so much critical mineral and rare earths that you won’t know what to do with them and they’ll be worth about US$2,” the US president said. Currently, China controls about 70 per cent of rare earth mining and 90 per cent of processing. While the details of the US$8.5 billion pact remain unclear, Albanese added that it included agreements on cooperation on not just mining but also processing. In the run up to the meeting, there were reports that a possible deal could give the US access to Australia’s proposed US$1.2 billion domestic stockpile, announced in April shortly after Trump unveiled his so-called “Liberation Day” tariffs. The US has a large trade surplus with Australia, which is among the countries with the lowest “reciprocal” tariff at 10 per cent. Ahead of Monday’s meeting between the two leaders, Australian officials have emphasised Canberra is paying its way under Aukus, contributing US$2 billion this year to boost production rates at US submarine shipyards, and preparing to maintain US Virginia-class submarines at its Indian Ocean naval base from 2027. Albanese shared that it was set up for a US$1 billion “contribution each from Australia and the United States over the next six months”. This will include investments in joint projects on rare earths and US investments in the processing of critical minerals in Australia. Planned projects among the US, Australia and allies like Japan are also part of the pact, according to Albanese. In recent years, Australia has touted its rich natural resources as a means to help counter China. The US and allies are anxious that the near-monopoly has provided Beijing with another tool for coercion and the ability to manipulate prices. Beijing’s recently announced new restrictions on the export of rare earths and related technology mirror the US’ own decades-old economic tools and were announced in retaliation to the Trump administration’s what Beijing derides as an unrelenting assault on Chinese companies. While Australia mines roughly half of the world’s lithium, used in making electric vehicle batteries, and about a quarter of global bauxite, along with vast amounts of cobalt, manganese and rare earth materials, most of these resources are exported to China for refining and processing. But the US remains hopeful. Kevin Hassett, the White House’s chief economic adviser, just hours before the Trump-Albanese meeting predicted that Australia is going to play a key role in efforts to break China’s critical minerals chokehold. “Australia is really, really going to be helpful in the effort to take the global economy and make it less risky, less exposed to the kind of rare earth extortion that we’re seeing from the Chinese,” he said. Hassett called Australia “one of the best mining economies on earth” with “the smartest and most capable refiners”, adding “they’ve got lots and lots of rare earths. I think there’ll be a lot of conversation about that matter today”.
