Opinion: US-Canada minerals cooperation more important than ever

Writing about United States-Canada cooperation today may seem like wishful thinking at best and fantasy at worst. Once close neighbours and allies, the two countries are now embroiled in a bitter trade war that serves neither’s best interests. Even if US tariffs are swiftly dropped and Canadian retaliatory duties follow suit, lingering mistrust will cast a long shadow over their relationship. The threat of renewed trade disputes will loom over Canada and Mexico as they approach the USMCA joint review.Given these tensions, analysts must remain realistic about the prospects for strengthening US-Canada ties in the near future. However, dismissing the North American project entirely would be premature. The size of the two economies, the complementarity of their industries, and their shared geopolitical challenges persist, regardless of political disagreements. One sector where cooperation remains especially vital is critical minerals.The Center for Strategic and International Studies (CSIS) recently released a policy brief, Mining for Defense: Unlocking the Potential for US-Canada Collaboration on Critical Minerals. Although the report was published before the latest tariffs, it serves as a blueprint for how the two nations can rebuild cooperation around one of the most strategically significant industries of the 21st century.Why minerals matterBefore delving into the brief’s recommendations, it is crucial to understand why critical minerals should be at the centre of any effort to revitalize US-Canada ties. Mining projects are uniquely vulnerable to tariffs. Unlike industries such as automotive manufacturing, mining companies are price-takers and cannot easily pass costs onto consumers. Mining also requires patient capital—investors willing to wait years before seeing returns—yet trade wars breed uncertainty, which causes such capital to evaporate. As a result, trade disputes can be existential threats to mining operations on both sides of the US-Canada border, potentially shuttering mines at a critical moment for North American mineral security.Moreover, miners must go where the minerals are. No tariff policy can alter geological realities and make it more effective to mine niobium in the US than in Canada, which holds the world’s second-largest reserves of the mineral. Even if the US were to discover new mineral deposits, it currently takes an average of 29 years from identification to first production at a mine. While the Trump administration has committed to expediting this timeline, even a 50% reduction would still mean waiting over a decade before seeing meaningful results. Meanwhile, imposing barriers to allied imports while China restricts its mineral exports would only exacerbate supply vulnerabilities.This is particularly concerning for minerals with unique defence applications, where global demand is relatively low but overwhelmingly concentrated in China. Beijing has strategically positioned itself as the dominant supplier of several specialty minerals and metals, giving it significant leverage over the global supply chain.Five key minerals for defenceThe CSIS report identifies five critical minerals essential to the defense industry, currently reliant on foreign adversaries for supply, and with the potential for Canada to serve as an alternative provider: gallium, niobium, rare earth elements (REEs), cobalt, and tungsten. Each of these minerals is already produced in Canada, in many cases with US backing, and all are at heightened risk of supply disruptions from China as trade tensions escalate.Historically, the US and Canada have collaborated closely on mining for defence. During World War II, Canada’s mineral resources were vital to the Allied war effort, supplying 40% of Allied aluminum, 95% of Allied nickel, and 12% of Allied copper. Taken from: CSIS – Mining for Defense. More recently, under the first Trump administration, the two nations finalized a joint action plan for critical minerals cooperation, which has since guided bilateral investment. Over the past five years, the US has invested $63.4 million under Title III of the Defense Production Act (DPA) into Canadian mineral projects, including a tungsten mine in the Yukon and Northwest Territories, as well as cobalt refineries and battery production facilities. Canada, for its part, has contributed $35.9 million in matching funds.While this cooperation is significant, it is not sufficient to meet the challenges ahead. The CSIS brief outlines several policy recommendations to enhance US-Canada mineral security:Creating a Canadian minerals fundCanada should create its own financing instrument for defence-critical minerals, similar to the US DPA Title III. This would enable Ottawa to direct investments toward key projects, help new mining initiatives navigate the difficult early stages of development, and attract private sector investment.Such an initiative would also address a longstanding point of contention between the two nations: defence spending. With Washington increasingly scrutinizing allies perceived as free-riding on US security guarantees, a Canadian critical minerals fund for defence applications could help Ottawa scale up its defense contributions. The recent rare earths agreement between Ukraine and the US sets a precedent for using minerals cooperation as a bargaining chip for security commitments—an approach Canada could leverage to reinforce US support for NATO and NORAD.USMCA minerals chapterThe upcoming 2026 review of the USMCA was initially expected to be a straightforward reauthorization. The recent tariff measures, however, suggest the US intends to revisit the agreement more broadly and perhaps on an accelerated timeline. Rather than resisting renegotiation, Canada and Mexico could use this opportunity to enhance the agreement’s strategic value.A dedicated USMCA chapter on critical minerals could include provisions to facilitate government investment in mining and processing, expedite permitting for mineral projects, stabilize prices, and incentivize long-term industry investment. Such measures would transform the USMCA from a trade pact into a strategic economic security framework for North America.Beyond these primary recommendations, the US and Canada should work together to attract patient capital for long-term mining investments, build strategic stockpiles of critical minerals vulnerable to supply disruptions, and jointly identify priority projects. Additionally, investment in new mines and supporting infrastructure in Canada’s High North could serve the dual purpose of strengthening both mineral security and Arctic defence—another key area of US-Canada security cooperation.Neighbours by geography, allies by necessityRestoring trust between the US and Canada will not be easy. But in the race to secure critical mineral supply chains, both nations would do well to recall the words of President John F. Kennedy: “Geography has made us neighbours. History has made us friends. Economics has made us partners. And necessity has made us allies.”For all their recent tensions, the US and Canada remain bound by shared economic and security interests. When it comes to securing the minerals that will define the future of defence and technology, cooperation is not just preferable — it is essential.____________________________________Christopher Hernandez-Roy and Henry Ziemer are analysts at the Center for Strategic and International Studies (CSIS), a non-partisan think tank based in Washington, D.C., which focuses on US defense/military policy and related issues.Weiter zum vollständigen Artikel bei Mining.com Weiter zum vollständigen Artikel bei Mining.com