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Maria Siow

Australia has secured backing from US President Donald Trump on two critical fronts through a new minerals investment deal and the future of the Aukus submarine pact, a development that analysts have said represents a major win for Canberra’s geopolitical status and economic security.
During Australian Prime Minister Anthony Albanese’s visit to the White House on Monday, the two countries signed a critical minerals agreement aimed at reducing their dependency on dominant supplier China and strengthening supply chains for key industries.
The deal will see Canberra and Washington invest US$1 billion over the next six months in mining and processing projects and set a price floor for the critical minerals.
A White House statement said the initiative would focus on US$53 billion worth of mineral deposits. It did not specify which minerals or sites would be prioritised.
“In about a year from now, we’ll have so much critical minerals and rare earths that you won’t know what to do with them,” Trump told reporters.
The two leaders also reaffirmed their commitment to the Aukus security pact – a trilateral agreement between Australia, the US and the United Kingdom under which Canberra is expected to receive nuclear-powered submarines built by its allies.
Asked whether his administration might lower tariffs on Australian exports, Trump replied that Canberra had been paying “very, very low tariffs”.

‘Very happy’ outcome for Canberra
Ian Hall, an international relations professor at Griffith University, said the Australian government was “breathing a big sigh of relief after the trip”.
“It went far better than they could have hoped,” Hall said, referring to the critical minerals deal and Trump’s positive assessment of the US-Australia alliance.
“Aukus appears to be safe for now, and Australia is not facing any more tariffs. All this could change, of course, but for now, Canberra will be very happy,” Hall said.
The critical minerals deal is expected to create significant economic opportunities for Australia and strengthen its strategic supply chains with key allies, according to analysts.
Rare earth minerals are critical for the manufacturing of advanced electronics and defence systems. With a near-monopoly on their production and processing, China’s export controls on the minerals have fuelled fears in other countries about the impact on their key industries.
“We know that American companies desperately need critical minerals, and Australia is very well-placed to service that need,” Australian Treasurer Jim Chalmers told reporters in Washington on Friday.
Earlier this year, Washington said it wanted to review the Aukus security pact to ensure its alignment with the Trump administration’s “America First” agenda.

Philipp Ivanov, founder of Geopolitical Risks and Strategy Practice, an advisory firm, described Albanese’s trip as a diplomatic and political success.
Apart from securing the critical minerals deal, Albanese also obtained assurances from Trump that the US would honour the Aukus agreement, Ivanov said.
“There does not seem to be any progress on the Quad, but in the context of this meeting, it’s a minor issue,” Ivanov said, referring to the Quadrilateral Security Dialogue comprising Australia, India, Japan and the US. Canberra has been pushing for the Quad to play a bigger role in enhancing regional security.
“Politically, Albanese proved his domestic critics wrong that his relationship and lack of direct contact with Trump undermined the US-Australia alliance,” Ivanov said.
On the critical minerals deal, Ivanov noted it did not contain many details. Australia and the US would need years – if not decades – before they could compete with China on this front.
“Pricing will also be a critical issue, and China will not be sitting idle watching the US and Australia undermining its current competitive market position,” Ivanov said.
On Aukus, Australia remained reliant on the commitment by the US and the UK to ensure its long-term viability, he added.


“So [Albanese] has won this trip, but the hard work continues, and Trump – as we know – is prone to shifting his positions and relationships,” Ivanov said.
It remains to be seen if China would retaliate against Australia over its critical minerals deal with the US while their bilateral trade continues to grow, according to Ivanov.
China is Australia’s largest trade partner, accounting for almost a third of Australian exports. Trade between the two countries rose to almost A$312 billion (US$202 billion) last year, according to Canberra’s data.
“Will that punishment include some forms of restrictions on Australia’s commodities shipped to China, for example, iron ore? Or will Beijing’s response be asymmetric and affect other areas of the relationship?” Ivanov said.
At a regular news briefing in Beijing on Tuesday, Chinese foreign ministry spokesman Guo Jiakun did not comment directly on the critical minerals deal.
He said: “Key mineral resource countries should play an active role in ensuring the safety and stability of the industrial and supply chain, and ensure normal economic and trade cooperation.”


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US President Donald Trump and Australian Prime Minister Anthony Albanese hold up their signed agreements on critical minerals and rare earths in the White House on Monday. Photo: AP

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Australian Prime Minister Anthony Albanese, then US president Joe Biden and then British prime minister Rishi Sunak speaking in San Diego in 2023 on the trilateral Aukus security pact. Photo: AP

A Virginia-class nuclear-powered attack submarine, a type of which Australia is set to acquire from the early 2030s under the Aukus pact.  Photo: US Navy

(Left to right) Indian External Affairs Minister Subrahmanyam Jaishankar, Australian Foreign Minister Penny Wong, Japanese Foreign Minister Iwaya Takeshi and US Secretary of State Marco Rubio after speaking to the media during their Quad meeting in Washington on July 1. Photo: AP

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North Korean leader Kim Jong-un. One analyst interpreted Wednesday’s missile launch as Kim saying to Trump: “Hello, I am here. Are you still interested in meeting me?” Photo: AFP/Getty Images/TNS

A short-range missile is launched from an undisclosed location in North Korea in 2023. Photo: KCNA/KNS/AFP

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This Week in Asia

Politics

The allies will invest US$1 billion in various critical minerals projects in a bid to cut their reliance on dominant supplier China


The allies will invest US$1 billion in various critical minerals projects in a bid to cut their reliance on dominant supplier China.


Australia scores big win in US with critical minerals deal, Aukus commitment

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}The allies will invest US$1 billion in various critical minerals projects in a bid to cut their reliance on dominant supplier China

The allies will invest US$1 billion in various critical minerals projects in a bid to cut their reliance on dominant supplier China