De-risking Together? Why the EU-U.S. Minerals Pact Needs an Indo-Pacific Wingman
By Benedetta Girardi
The European Union (EU) and United States (U.S.) are navigating a similar problem with critical raw materials (CRM): supply chains are concentrated abroad, while domestic demand is rising for key minerals needed for defense, energy, and advanced technologies. Because China dominates the landscape for refining several critical minerals, Beijing has significant leverage over industries on both sides of the Atlantic. Recent export controls showed how quickly that leverage can disrupt global supply chains.
Still, the strategic value of CRM and the evolving nature of transatlantic relations make complete alignment of U.S.-European efforts unlikely. The more realistic goal is coordinated de-risking. This would involve diversifying suppliers; expanding processing and recycling; and working with Indo-Pacific partners that can contribute resources, technology, and industrial capacity.
For the EU, this could also mean linking more closely with Washington’s existing partnerships in the Indo-Pacific. Doing so would give the EU access to existing financing and geological networks in the region rather than requiring it to establish parallel ones from scratch.
The intention is not to trade dependence on China for dependence on each other. Rather, the EU and the U.S. would continue to seek strategic autonomy while collaborating to build a more diversified network of partners. This network would, in turn, bolster the credibility of their respective pursuits for greater autonomy.
A Handshake 3 Years in the Making
A first step in the right direction happened in April 2026, when EU Trade Commissioner Maroš Šefčovič and U.S. Secretary of State Marco Rubio signed a memorandum of understanding (MoU) and a joint Critical Minerals Action Plan. The deals cover the full CRM value chain, from exploration to recycling, and build on a February ministerial that also included Japan. Both sides are also discussing a broader, legally binding “plurilateral” agreement open to other partners.
The ambition for transatlantic cooperation on CRM is not new. Washington and Brussels tried and failed to strike a similar deal under the Biden administration in 2023, stalling over subsidy eligibility and labor standards. This time, the politics are different, but the underlying tension has not disappeared: The EU wants binding standards, and the U.S. leans on market tools such as price floors and offtake agreements, under which buyers commit to purchasing a producer’s future output .
Enter the Quad
Neither side can out-mine China alone, which highlights the importance of the Indo-Pacific region. A month after the EU-U.S. signing, Australia, India, Japan, and the U.S.—the four members of the diplomatic partnership known as the Quad—unveiled a $20 billion Quad Critical Minerals Initiative in New Delhi. Japan and Australia also committed roughly $1.2 billion to shared mining and refining projects, and India's tariff-free critical minerals trade with Australia is expanding under their bilateral trade pact.
The EU has no equivalent seat at that table, with regard to mining. The best path forward is therefore to link itself to Washington to access the Quad's financing and geological reach. Doing so would be more efficient than building a parallel Pacific network from scratch, which would stretch already scarce capital further.
Industry sees the upside of mining diversification faster than governments do. European magnet makers and U.S. defence contractors both want predictable, non-Chinese supply, and neither particularly care which flag is on the mine. Miners in Australia and India, for their part, want buyers locked in before they deploy capital to new refineries. That alignment of incentives is real, and the gap is in the middle: Financing, standards, and timelines still run on separate tracks in Brussels, Washington, and the Indo-Pacific capitals in between.
Where It Gets Hard
The challenge is turning CRM ambitions into practice. Europe's Critical Raw Materials Act sets binding 2030 targets: domestic mining should cover 10 percent of consumption, processing 40 percent, and recycling 25 percent. Washington favors a more flexible approach, combining interventionism and market-access tools. Quad partners add a third layer: Australia and Japan lean on direct co-investment in mining and refining, while India pairs tariff elimination with its own industrial-policy push. Aligning different playbooks without watering down any of their ambitions is a complicated affair for the U.S. and the EU.
Additionally, CRM cooperation negotiations are happening against a backdrop of tariff disputes that have nothing to do with minerals or a transatlantic alliance that is undergoing major shifts. Trust built in one trade field can quickly disappear in another, creating confidence gaps not only for governments, but also for industries and investors alike.
Indo-Pacific states themselves have suffered in the current international trade environment, and they are not simply geopolitical extensions of Europe or the U.S.—their interests differ. India wants to build out its manufacturing and processing capacity; Australia seeks investment and market access; Japan prioritizes supply security for advanced manufacturing. A durable coalition must thus offer economic benefits, not only alignment against China.
Lastly, a financing gap is likely to persist, if not widen, for concrete EU–U.S.–Indo-Pacific CRM projects. Diversification is extremely costly along the entire supply chain. Even under optimistic scenarios, non-Chinese production of key rare-earth elements is projected to fall 36 percent short of demand by 2030. China's own suspension of expanded export controls expires January 10, 2027, leaving little time to prepare. With different financing systems and capabilities, funding cooperative de-risking is likely to be a hard endeavour for Washington, Brussels, and Indo-Pacific countries.
What Comes Next
The aforementioned obstacles shouldn’t deter the EU and the U.S. from exploring joint opportunities for de-risking with Quad partners. In particular, three steps can cement transatlantic cooperation on CRM:
Formalize the timeline. Convert the April MoU into a binding agreement with a hard deadline instead of an open-ended process before China’s export control waiver resets the clock in January 2027.
Merge the tracks. Give the EU a structured link to the Quad’s Critical Minerals Initiative to facilitate process streamlining and to avoid the U.S. and the EU competing for the same mines.
Fund the middle of the chain. Political statements will not refine a single kilogram of neodymium. Offtake agreements and co-financed processing plants from the EU, the U.S., and Indo-Pacific partners will.
The competition over CRM is not going away. China's leverage is structural, not temporary, and no single partnership will dissolve it. But a transatlantic pact wired into the Quad's capital and geology stands a far better chance than two overlapping bureaucracies working on the same problem in isolation.
Benedetta Girardi, is a 2026 Fellow of the Bertelsmann Foundation and Programme Coordinator and Strategic Analyst at the Hague Center for Strategic Studies.