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What good is a tank if you can’t get the metals to build it?
This week’s meeting between U.S., Ukrainian, and European leaders showed potential progress towards security cooperation. And while the new U.S.-Ukrainian Reconstruction Investment Fund agreement marks an important step toward increasing the resilience of both U.S. and European supply chains, there is more work to be done. Building on this momentum, the United States and the European Union should seek closer critical minerals supply chain cooperation.
There are several opportunities for the two economies to work together by focusing on defense and security — rather than the economic and clean energy framing of the past. Tighter cooperation could strengthen the E.U. defense-industrial base, enhance military readiness, and strengthen NATO’s deterrence posture while enabling the United States to secure critical minerals, preserve manufacturing capacity, and redirect precious resources to the Indo-Pacific. Supply chain cooperation would also help both sides reduce dependence on China, which dominates the critical minerals market by creating oversupply and using export restrictions. Indeed, the China challenge requires the United States and Europe to work together.
The cooperation mechanisms we highlight — trade guardrails, bolstering industrial base efforts, and leveraging lessons learned — are novel and could be included within existing frameworks, a broader U.S.-E.U. minerals deal, or as individual agreements.
Europe Sharpens Its Defense-Industrial Priorities
Russia’s aggression against Ukraine has helped to catalyze Europe’s shift from mere discussions about defense capacity-building to concrete action beyond NATO’s new spending pledge. Defense and security are central issues for the 2024–2029 political cycle in Europe. The European Union has prioritized boosting defense production in key policy documents and regulatory proposals, including the 2023 European Defence Industry Reinforcement Through Common Procurement Act. The act’s €300 million ($350 million) seed funding has already unlocked over €11 billion ($12.8 billion) in joint procurement. This funding is rapidly replenishing ammunition and modernizing key platforms such as armored vehicles and tanks.
Meanwhile, the European Defence Fund supports research projects with participants from multiple countries and strengthens interoperability. The proposed European Defence Industry Programme promises a further €1.5 billion ($1.75 billion) to shore up industrial resilience and secure a steady supply of goods and services so E.U. members can meet their defense-related commitments. The recent activation of the Stability and Growth Pact’s escape clause by at least 15 members provides flexibility to dedicate up to 1.5 percent more of their GDP to defense investments over the next four years.
Further still, the 2024 Draghi report on European competitiveness and the Niinistö report on strengthening Europe’s Civilian and Military Preparedness and Readiness laid the groundwork for future action to support the European defense industrial base.
In March 2025, the European Union set out a strategic vision for strengthening its defense capabilities in its White Paper for European Defence – Readiness 2030 and the ReArm Europe Plan/Readiness 2030 financing scheme. The latter dedicates €800 billion ($933 billion) in defense spending by allowing E.U. countries to increase their budgets, launches a €150 billion ($175 billion) loan instrument, and expands European Investment Bank lending for defense projects.
To achieve this vision, the European Union must secure the critical minerals — like cobalt, rare earth elements, and gallium — needed for military applications and dual-use technologies. This includes lithium-ion batteries, for which demand will only increase “exponentially” in the future, as noted in the 2024 European Critical Raw Minerals Act.
This first European Union-wide regulation dealing with critical minerals aims to reduce the bloc’s dependence on foreign sources with outsized market power (i.e., China), build resilience, and secure the materials needed for clean energy, digital, and defense technologies. Beyond a strong push to use more European resources through mining, refining, and recycling, there is an effort to diversify imports through bilateral (14 in place so far) and multilateral mechanisms like the International Energy Agency, the G7, and the Minerals Security Partnership.
Shared Goals but Slow Progress
European defense capacity-building is a shared goal of the United States and the European Union, and securing important supply chains and maintaining access to critical resources, including critical minerals, should be central to this effort. Cooperation on critical minerals should reflect the reality that the U.S. and European supply chains are already tightly integrated across many parts of the trans-Atlantic defense-industrial base. The 2022 Minerals Security Partnership laid the groundwork for cooperation through matching mining projects with capital. And the European Union tried to advance bilateral cooperation in 2023 and 2024 by negotiating a Critical Mineral Agreement with the United States. While these efforts focused primarily on critical minerals for energy and digital technologies that address climate change and promote economic growth, critical minerals for defense and aerospace applications have now become as important. Addressing this demand requires rethinking how this cooperation can be shaped, especially in light of restructured Inflation Reduction Act tax incentives.
Progress is complicated by the unpredictability and inconsistency of current U.S. trade policy. Despite ongoing communication and regular engagement, the structure and scope of potential U.S.-E.U. cooperation remain unclear. The future of international cooperation mechanisms like the Mineral Security Partnership and Trade and Technology Council also remain in doubt pending the Senate confirmation of senior administration officials and the Section 232 investigation into critical minerals. Whether through the Minerals Security Partnership, trade talks, or mineral agreements, shifting towards a defense and security cooperation framework could be the answer to slow progress.
New Opportunities for Defense-Industrial Base and Supply Chain Cooperation
While U.S. trade policy poses challenges to U.S.-E.U. relations across various sectors, including critical minerals, it can also create opportunities for collaboration. Current U.S. policy could potentially serve as a springboard for strategic mineral talks including joint initiatives and minerals agreements centered on defense and security. One priority area could include developing coordinated guardrails to protect U.S. and European firms up and down the mineral-technology value chain. This would help address China’s unfair market practices. This system of guard rails could include a sectoral trade agreement on a select commodity group, mineral-swap agreements to sell stockpiled commodities to one another in the future, and supply chain intelligence sharing. Joint stockpiling of critical minerals could build off existing Nordic initiatives, which could secure minerals from European mines for U.S. stocks and could further support European efforts to boost domestic extraction and processing capabilities.
The United States can bolster current E.U. efforts. For example, the bloc has already begun implementing the Critical Raw Mineral Act. In March 2025, the European Commission selected 47 strategic domestic projects, including initiatives focused on magnesium and tungsten. In June, it selected another 13 strategic projects outside the European Union, including in Ukraine and the United Kingdom. Brussels and Washington can work together to reduce risk of these projects and the United States has expressed a willingness to do so: At the July 2025 Ukraine Recovery Conference, the U.S. Development Finance Corporation announced it would welcome co-investment by the European Investment Bank in the new U.S.-Ukraine Reconstruction Investment Fund.
The United States and the European Union can also learn from each other to develop new capabilities to secure supply chains. The European Union recently launched an Energy and Raw Materials Platform to pool demand for energy and minerals that includes a matchmaking mechanism between suppliers and consumers. The platform’s hydrogen matchmaking mechanism is already running and its raw materials one will soon follow. By the end of 2026, in line with the Draghi report, the European Union will set up a Critical Raw Material Centre to jointly purchase raw materials for interested companies and in cooperation with individual member states. Other areas of potential U.S.-E.U. cooperation might include coordinating strategic stockpiles, supply chain monitoring, and designing financial products to invest in upstream supply. If done with sufficient ambition and financial power, the Critical Raw Material Centre could resemble the European equivalent of the Japan Organization for Metal and Energy Security, which has effectively managed Japan’s mineral supply chain risks. The European Union’s efforts to adapt institutions to the industrial challenges posed by China’s exports can serve as lessons learned and leveraged by the United States to address its techno-economic competition with China.
Conclusion
Focusing on strategic and security implications by prioritizing U.S.-E.U. cooperation on defense-related critical minerals could provide impetus for both sides to retool the Minerals Security Partnership, resolve trade differences, or broker minerals agreements. Doing so could allow the two economies to erect trade guardrails to protect their nascent mineral-technology industries, bolster current efforts already underway, and streamline policy implementation by leveraging lessons learned. Europe has shown its determination to continue economic, humanitarian, and military support for Ukraine and strengthen its own defense capabilities. More self-reliant and militarily capable European allies would not only contribute to trans-Atlantic security but also support U.S. efforts to secure critical minerals and preserve industrial capacity to support its strategic objectives in the Indo-Pacific — it’s an opportunity to thread the needle on securing supply and supplying security.
Fabian E. Villalobos is a senior engineer at the RAND Corporation and professor of policy analysis at the RAND School of Public Policy whose research focuses on the intersection of technology, economics, and geopolitics. You can follow him on Twitter or LinkedIn.
Khrystyna Holynska is a policy researcher at the RAND Corporation whose research focuses on international security and strategic competition.
Peter Handley is a strategic advisor with the Hague Centre for Strategic Studies and a senior fellow with the European Initiative for Energy Security. You can follow him on LinkedIn.
Image: Midjourney
