US-Japan Critical Minerals Pact Moves Toward Price Floors as China Squeezes Japan's Rare Earth Supply

In March 2026, at a summit in Washington, US Trade Representative Jamieson Greer announced a US–Japan action plan on critical minerals. It’s meant to be the basis for a binding agreement among several countries, with minimum prices for minerals enforced at the border, coordinated stockpiles and joint financing for mining and processing projects. The same summit added a memorandum on deep-sea rare earths near Japan’s Minamitorishima island and a second tranche of Japanese investment, up to $73 billion, including 13 critical mineral supply chain projects.

The urgency comes from China. Japan is the country where Beijing has used rare earth leverage most directly in 2026, and the US is building its minerals policy around the lesson.

The US–Japan track

It began in Tokyo in late October 2025, when President Trump and Prime Minister Sanae Takaichi signed a framework on securing critical minerals and rare earths. It promised joint project financing within six months through grants, loans, equity, offtake deals and insurance, plus pricing measures, complementary stockpiling and a rapid response group led by the US Energy Secretary and Japan’s industry minister. It named no dollar amounts and isn’t legally binding.

The money came through Japan’s $550 billion investment pledge to the US. A first tranche of up to $36 billion in February 2026 included a $600 million synthetic diamond grit plant. In January 2026 a Section 232 proclamation on processed critical minerals told Commerce and the trade representative to negotiate agreements and price floors instead of imposing tariffs right away. In February the US launched FORGE, a successor to the Minerals Security Partnership, and announced Project Vault, a $12 billion US stockpile, $10 billion of it from the Export-Import Bank.

What China did to Japan

The dispute began in November 2025, when Takaichi told Japan’s parliament that a Chinese attack on Taiwan could amount to a survival-threatening situation for Japan. In January 2026 China banned exports of dual-use items to Japanese military end users and uses, including rare earth magnets, tungsten and molybdenum. In February it put 20 Japanese organisations on its export control list and 20 on a watch list. In June it added roughly 40 more across the two lists, including Mitsubishi Heavy Industries group companies and Japan’s National Institute for Defense Studies. About 80 Japanese entities are now on one list or the other.

The effect shows up in trade data. Japan imported 13 tonnes of dysprosium in the first half of 2026, 82% less than in the first half of 2024. In four of those six months it imported none. Yttrium imports fell 74%.

Why it matters for Washington

China suspended its broadest rare earth controls for the US and most of the world as part of the trade truce with Washington, now extended to January 2027. Japan got no such relief. That’s the warning in the Japanese case: Beijing can turn supply on and off country by country, and a truce with Washington doesn’t protect allies.

The US response is to build a market China can’t easily undercut. Price floors make non-Chinese mines and refineries viable when Chinese producers cut prices. Stockpiles cover the gaps. Japan, which has rebuilt its supply chains once already after a Chinese cutoff in 2010, is the natural first partner.

None of this produces rare earths quickly. Mines and refineries take years. For now, the US–Japan plan is a framework, a stockpile and a set of investment pledges. The binding price-floor agreement is the next step to watch.