Over the last several decades, the United States military has fallen short of readiness for great power competition, whether in such critical areas as naval fleet size, modernization, defense industrial base, and the capacity to wage a multi-front war. This dynamic includes America and its private industries relinquishing control of their supply chains. As global markets have increasingly relied on foreign countries, America has become more dependent on the goodwill of its competitors and adversaries to ensure access to the materials that power key technological innovations. Similarly, as long as it remains on the sidelines of critical mineral markers, the U.S. will be subject to price shocks and volatility that impair its ability to develop domestic mines and refineries.
With this issue in mind. POLITICO reported on August 29th that the Biden administration was considering setting price floors for certain critical minerals produced domestically. according to an unnamed source from the Department of Energy. If the market prices for a domestically produced mineral fall below a set level. DOE would step in to pay the difference for certain projects. While the policy is still under consideration, setting price floors would be a major step towards greater government support of domestic mining capabilities.
Before assessing the utility of a price floor, it is worth examining the current state of the market and better understanding how price volatility shocks stop American companies from utilizing domestic supplies of critical minerals.
The full article can be found in the Oxford Diplomatic Society’s Dispatch No. 14.
Farrell Gregory is a Research Assistant at Yorktown Institute, visiting student at Mansfield College and Policy Fellow at Foundation for American Innovation
