 The US Agreement on Trade in Critical Minerals (ATCM): Reshaping Critical Minerals Supply Chains and Korea’s Strategic ResponseHyun Seok Kim and
Jooyoung Yang
No 223, i-KIET Issues and Analysis from Korea Institute for Industrial Economics and Trade Abstract: The United States is pursuing the Agreement on Trade in Critical Minerals (ATCM) with five principal objectives: diversifying critical minerals supply chains, reducing dependence on China, building a preferential trading bloc among allies, establishing a price stabilization mechanism, and setting rules for investment and trade. Washington has designed the agreement as a legally binding plurilateral framework for industrial policy cooperation, intended to sustain and expand the critical minerals production capacity and industrial base of partner countries. The instruments under consideration include a price floor, a common external tariff, minimum import prices, and reference pricing powered by artificial intelligence (AI). Each is meant to counter low-price offensives and overcapacity in specific countries while preserving investment incentives and production capacity among allies. Taken together, they amount to an attempt to build a new allied critical minerals market for critical minerals. Many other countries also see China’s domination of critical minerals supply chains as a major risk, distorting prices and creating major dependency risks, and that diversification is necessary. But not all are on board with Washington’s interventionist instruments: the price floor, the common external tariff, and AI-based pricing are likely to become central points of contention in negotiations. Korea faces a dual dependence: on China for processed critical minerals and on the United States and the European Union as export markets for derivative products. Should the ATCM build a “friendly” supply chain and establish a preferential trading system, Korea stands to diversify its sources of processed critical minerals and to secure steadier access to US and EU markets. But if major suppliers remain outside the agreement, any gains could be offset by new supply chain risks. This study argues that Korea should weigh participation in ATCM as a question of industrial competitiveness and supply chain resilience rather than one of resource diplomacy alone. It recommends a principle of selective and conditional participation in the price floor and the AI-based reference pricing system, coupled with diversification of supply through platforms such as FORGE, expanded recycling and domestic production capacity, and complementary domestic measures covering statistics, monitoring, and strategic stockpiling. This paper was translated from the original Korean using the Claude Opus 5 large language model (LLM). It was professionally edited and reviewed by the author prior to publication. Keywords: critical minerals; Agreement on Trade in Critical Mineras; ATCM; supply chains; rare earth elements; REEs; lithium; nickel; cobalt; global trade; global value chains; trade policy; trade competition (search for similar items in EconPapers) Published as i-KIET Issues & Analysis, No. 223 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:ris:kietia:023242 Access Statistics for this paper More papers in i-KIET Issues and Analysis from Korea Institute for Industrial Economics and Trade Sejong National Research Complex, Korea Institute for Industrial Economics and Trade, 370 Sicheong Dae-ro C-dong 8-12F 30147, Republic of Korea. Contact information at EDIRC. |
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