Why GM and miners are split on Trump's critical minerals price plan

The Trump administration's push to build a Western critical minerals trading bloc is running into resistance from G7 allies and a mining industry that cannot agree on the central question: should prices be set by the government, or left to markets?

Vice President JD Vance first floated the idea in February. The goal was to break China's grip on the minerals that go into semiconductors, servers, military gear and batteries. Beijing built that dominance by operating at a loss for years, crushing prices for cobalt, lithium, nickel and other inputs until Western rivals could not compete. The U.S. answer: a bloc that would use price supports, subsidies, guaranteed purchases or adjustable tariffs to make Western production viable.

Since then, the plan has lost momentum. G7 members have pushed back against U.S. Trade Representative Jamieson Greer in private talks and cooled on the idea of tying the bloc to a pricing model built by a Pentagon AI program, three sources told Reuters. European officials said the core concerns are who pays the premium, how far down the supply chain subsidies go, and how governance would work.

More than 230 public submissions from miners, refiners and their customers, reviewed by Reuters, show the U.S. industry is split. Several prominent companies and trade groups recommended against price setting. The National Mining Association told Greer to focus on tax credits and incentives instead. Rich Nolan, the group's CEO, said market interventions "may play a role in certain circumstances" but incentive-based approaches are better suited to the industry's problems.

General Motors, which is building North America's largest lithium mine with Lithium Americas, submitted its own proposal. So did recycler Umicore, platinum miner Sibanye Stillwater, the U.S. Chamber of Commerce, and MP Materials, the rare earths company that received the only U.S. government price floor last July.

"There's nervousness from all sides about what to do and how different actions could affect different parts of the supply chain," said Blake Harden, a managing director focused on trade policy at EY.

The pricing fight

The Trump administration wants to set prices using the Pentagon's OPEN AI metals program, built by DARPA. The model calculates what a metal should cost when labor, processing and other inputs are factored in, while stripping out what the U.S. calls Chinese market manipulation. European allies oppose the idea, one source said, citing concerns about Washington having too much control over the bloc's pricing.

"For Europe, it would be better to have a price index based on real deals in the European market," said Nicola Beer, who oversees minerals financing at the EU-controlled European Investment Bank. "The question is whether we can make these opaque pricing mechanisms more transparent, more market-driven, and less prone to manipulation."

As an alternative, an EU-funded agency called EIT RawMaterials is working with digital platform Metalshub to create indexes outside Chinese government-led pricing. Those indexes could include the U.S., Australia, Canada and Britain.

Bilateral vs. multilateral

Canada and France, which holds the G7 presidency, want a bloc led by the G7. The United States wants to skip multilateral talks and forge fast bilateral deals, then expand them later, three sources said. That shift in strategy from Vance's original plan was visible in Greer's comments at the OECD ministerial meeting in Paris in early June.

"What we're trying to do is take some of these approaches and turn them into an agreement," Greer told reporters. The U.S. would use price supports "to protect production of critical minerals and derivative products. We want to phase it in. If other countries want to join us in that, they're welcome to do that."

Washington aims to present binding bilateral agreements to Japan and the European Union before the end of June, two sources said. The first deal could cover five to 10 minerals, including heavy rare earths, antimony, graphite and tungsten, all subject to Chinese export bans or restrictions.

The timeline

The topic will be a key talking point as G7 members meet this week in France. A draft U.S. proposal using the DARPA pricing model has been delivered to the White House and the National Security Council, and U.S. representatives are expected to brief G7 allies on its contents at the meeting, according to a U.S. official.

European and industry officials said they want to study the impact of price supports over the medium and long term rather than commit to quick deals, at odds with the faster-paced Americans. The Trump administration is also reluctant to embrace France's idea of a permanent administrative secretariat within the IEA or OECD to track G7 initiatives on critical minerals as presidencies rotate, the sources added.

"It is a very hard thing to do, and I'm happy I'm not the one doing it," said Ashley Zumwalt-Forbes, a minerals investor who ran the U.S. Department of Energy's batteries and critical minerals portfolio under former President Joe Biden.

GM's stock page carries an Alpha Score of 40 out of 100, labeled Mixed, reflecting the uncertainty around how the company's massive lithium bet fits into a policy framework that is still being written.