G7 Drafts New Critical Mineral Plan 📖

G7 leaders have provisionally agreed on a joint strategy to protect critical mineral supplies, according to a Reuters report. The plan calls for coordinating responses to supply disruptions, diversifying sources of mining and refining, and aligning mineral markets with the costs of responsible production.

The move follows China’s April decision to restrict exports of several key rare earths and magnets—materials essential to electric vehicles, semiconductors, and defense manufacturing. Although Chinese President Xi Jinping recently agreed to resume some rare earth exports to the U.S., G7 leaders view Beijing’s dominance as a geopolitical risk.

Chinese automaker BYD has increased its electric vehicle (EV) exports to Brazil, sparking concern among local industry groups and labor unions. In May, the world’s largest car carrier docked at Itajaí port with thousands of BYD vehicles—part of a broader push that’s brought 22,000 units to Brazil this year.

Imports of Chinese-built vehicles are expected to increase by 40% in 2025, reaching 200,000 units, or approximately 8% of all light-vehicle registrations. Industry leaders say Chinese firms are taking advantage of Brazil’s temporarily low EV import tariffs, which began at 10% in January 2024 and are set to rise gradually to 35% by mid-2026.

Labor unions are now calling on the government to expedite the full tariff hike, warning that unchecked imports could threaten domestic production and lead to job losses.

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The U.S. has cleared a major new infrastructure proposal aimed at easing trade congestion along the southern border. Austin-based startup Green Corridors received a presidential permit from Donald Trump this month to build a $10 billion elevated freight “guideway” between Laredo, Texas, and Monterrey, Mexico.

The 165-mile corridor would carry autonomous diesel-electric hybrid shuttles that haul trailers between four proposed terminals—two in Texas, two in Mexico. Freight would be dropped off at one end, loaded onto the shuttles, and picked up by local truckers on the other side. The system is designed to complement, not replace, existing trucking and rail routes, and is optimized for trips under 200 miles.

Construction is not expected to begin until several permitting hurdles are cleared, including those from the Mexican government. Green Corridors says it hopes to begin testing the system by 2031.

The escalating Israel–Iran conflict is driving up shipping insurance costs across the Middle East, straining trade routes vital to global commerce. According to data from Marsh McLennan, the world’s largest insurance broker, marine insurers are now charging 0.2% of a ship’s value for voyages into the Persian Gulf — up from 0.125% before Israel’s surprise attack on Iran last week. War risk cover for Israeli ports has spiked even more sharply, tripling to 0.7%, while rates for the Red Sea are also on the rise.

The heightened volatility has prompted some shipping firms to reroute vessels away from the Strait of Hormuz. Although cargo is still moving through the region, insurers have cut the validity of coverage quotes from 48 hours to just 24 hours, reflecting growing caution.

Industry leaders warn that any prolonged disruption through Hormuz could ripple through energy markets, spike freight costs, and stall supply chains.

In May, China’s shipments of rare earth magnets plunged to just 1,238 metric tons—a drop of over 50% from April and the lowest monthly total since February 2020. On a year-over-year basis, shipments fell by a staggering 74%, while exports for January through May declined by 14.5% compared to the same period last year.

This slump was largely driven by export restrictions implemented in early April, covering seven mid-to-heavy rare earth products and certain magnets. Although China has vowed to expedite export approvals after a potential trade deal with the U.S., customs officials remain cautious, particularly due to a single export code that categorizes all magnet types under one category.

Four U.S. senators have reintroduced the RAPID Reserve Act, a bill aimed at reducing America’s dependence on foreign pharmaceutical supply chains. The legislation would direct the Department of Health and Human Services to award contracts to drug manufacturers based in the U.S. or allied countries to maintain reserves of essential medicines and ingredients.

The move follows a 2023 report showing over 295 medications were in short supply nationwide. Supporters say the bill would address recurring drug shortages and bolster national security by building out reliable, domestic manufacturing.

The FDA currently lists 88 drugs as being in short supply. Meanwhile, the ASHP reported 323 drug shortages in early 2024, the highest since tracking began in 2001.

Backers of the bill include Sens. Gary Peters (D-MI), Marsha Blackburn (R-TN), Tim Kaine (D-VA), and Ted Budd (R-NC)

Texas Instruments has announced a landmark $60 billion investment to expand semiconductor manufacturing across seven new fabrication facilities (fabs) in Texas and Utah, marking the largest such investment in U.S. history. The move, aligned with the Trump administration’s push to onshore critical tech production, will support over 60,000 jobs and strengthen domestic supply chains for chips powering everything from smartphones and AI to cars and satellites.

TI's expansion is backed by partners like Apple, Ford, NVIDIA, Medtronic, and SpaceX, all of whom depend on TI's U.S.-made analog and embedded chips.

Cargo volumes at the Port of Los Angeles have fallen sharply under the weight of Trump’s new reciprocal tariff regime. According to Port Executive Director Gene Seroka, truckers who previously hauled four to five containers a day are now down to just two or three.

The port recorded 17 cancelled sailings in May, erasing 225,000 containers and marking the lowest May throughput in over two years, with volumes down 19% from April and 5% year-over-year.

The slowdown is straining truckers and dock operations, despite expectations of a summer import surge. While some retailers are reportedly frontloading ahead of looming tariff hikes in July, Seroka noted that there is no clear evidence of a holiday inventory buildup. Without long-term trade clarity, he warned, shoppers could be looking at higher prices and thinner shelves through the back-to-school and year-end shopping seasons.

At the G7 summit, U.S. President Donald Trump and Canadian Prime Minister Mark Carney signaled optimism about reaching a bilateral trade deal within weeks, despite diverging views on tariffs. Trump called a deal “achievable” but reiterated his preference for tariffs as “simple and easy,” while Carney pushed for removing steep U.S. levies on steel, aluminum, autos, and other key Canadian exports.

Both leaders acknowledged ongoing differences, but discussions have advanced, with proposals exchanged and recent talks focusing on trade rules for metals. Carney has so far held off retaliatory measures but warned of possible counter-tariffs if talks fail.

Taiwan has added China’s top tech players — Huawei and Semiconductor Manufacturing International Corporation (SMIC) — to its export control entity list, banning local firms from shipping key technologies to them without prior approval.

The move tightens access to plant construction tools and materials vital for building advanced AI chips and is expected to hamper China's chip ambitions. This marks the first time Taiwan has formally named these firms, following earlier reports of Taiwanese involvement in Huawei's secret chip projects in China.

Over 600 entities from China, Russia, Iran, and others were added to the list on June 10, citing national security

The European Union’s goods trade surplus with the U.S. grew in April, defying Washington’s escalating tariffs. Eurostat data showed the surplus rose even as EU exporters faced steep duties—25% on steel and aluminum, 50% on metals, and 10–20% reciprocal tariffs on most goods.

Exports to the U.S. surged earlier in the year as importers stockpiled ahead of the hikes. Despite this, the EU’s overall trade surplus fell to €7.4B as exports to China declined for a ninth straight month and deficits widened with Norway, South Korea, and China.

Nippon Steel has completed its $14.9 billion takeover of U.S. Steel, finalizing a deal that grants President Trump an extraordinary level of influence over the iconic American firm.

As part of a national security agreement, the U.S. government now holds a "golden share," giving Trump the power to appoint a board member and veto key decisions, like job cuts, plant closures, overseas relocations, and even name changes.

The agreement, aimed at easing political opposition, helped overcome earlier resistance under the Biden administration. Nippon now controls 86 million tons in global production capacity and plans to invest $11 billion into U.S. operations by 2028.

This newsletter was curated by Shyam Gowtham

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