In this article, Project Blue examines what President Trump’s (second) first week in office reveals about the future of critical material supply chains.

President Donald Trump began his second term with a highly visible signing of executive orders focused on trade, foreign aid, immigration, civil rights, and more – clearly signalling his intent to act swiftly and decisively on several campaign promises.

Through both his inaugural address and a commanding virtual speech at the World Economic Forum (WEF) in Davos, Trump outlined his domestic priorities and a robust, isolationist foreign policy agenda.

Below, we explore how Trump’s (second) first week in office offers insights into the future of critical material and energy transition supply chains.

Critical Materials Front and Centre

Critical materials were far from overlooked amid the flurry of executive orders signed last week. Declaring a National Energy Emergency, Trump stated, “...the energy and critical minerals identification, leasing, development, production, transportation, refining, and generation capacity of the United States are all far too inadequate to meet [its...] needs.”

Meanwhile, the Unleashing American Energy order instructed relevant agencies to identify and revise actions that impose undue burdens on domestic mining and processing of non-fuel minerals. Trump’s cabinet nominees for Secretary of the Interior (Doug Burgum), Energy Secretary (Chris Wright) and E.P.A. Administrator (Lee Zeldin) are all avid supporters of, or stakeholders in, the US oil and gas industry and will endeavour to deregulate permitting and fast-track approvals for energy infrastructure as quickly as possible.

The order also tasked the Secretary of the Interior with updating the U.S. Geological Survey’s critical minerals list (last published in 2022), prioritizing geologic mapping for critical minerals, and ensuring federal support for related projects.

Additionally, the Secretary of Defense (confirmed to be Peter Hegseth) was directed to bolster the National Defense Stockpile (NDS) to ensure a robust supply of critical materials in the event of future shortages. This directive, however, is nothing new, as the Biden Administration had already identified that the current NDS falls well short of mitigating defense, civilian and emergency requirements, with a $13.5 billion gap – though it has been many decades since there were any funds appropriated by Congress to add to the reserves. (In fact, the NDS has been sold down over time to fund its own operations.)

These orders underscore the administration’s perspective on critical materials— simultaneously a matter of national security, an energy and climate policy issue, and an economic opportunity. In the coming months, we can expect intensified focus on critical materials from the Trump administration through these interconnected lenses.

Unleashing American Energy (But Not Wind!)

Unleashing American Energy prioritises energy production on federal lands and waters, and requires a review of regulations hindering domestic energy.

It is, on paper, good news for oil and gas producers (and the critical materials required for drilling equipment and infrastructure), as well as miners and those developing mid-stream and downstream refining projects. It promises a streamlining of project permits and targeting of any agency actions that appear to burden domestic mining. Whether the world actually needs more US oil, and whether US producers would actually be willing to increase supply and risk lower prices, is a separate question.

For industries related to energy transition, it is a mixed bag, and again already well-projected from Trump’s campaign trail. The Executive Order aims to rescind several Biden-era orders – eliminating the ‘EV mandate’ and halting aspects of the Green New Deal (Inflation Reduction Act or IRA).

A slower EV rollout in the US now looks inevitable, with EV sales targets, subsidies and policies set to be removed. Thus, while the Executive Order might spell good news for building out US battery plants and its critical material supply chain, it could simultaneously moderate demand for their end products.

For the battery industry, the longer-term question remains the survivability of international partnerships, and the accompanying funding, to bring expertise to US-based projects. And ultimately, individual consumers and fleet buyers will determine whether gasoline or electricity will power their cars.

The biggest loser in Trump’s first week was wind power. The President paused new permits for offshore wind projects, imposed a moratorium on onshore and offshore wind energy approvals, and ordered agencies to assess the environmental and community costs of idle sites. Moreover, the Outer Continental Shelf (OCS) is withdrawn from new wind energy leasing, though existing leases remain intact pending review.

Overall, the economic impact of IRA rollbacks could be significant (if indeed they come to pass). While the Biden Administration managed to finalize grants that would disburse $97 billion to clean energy programs, some $11 billion of expected grant funding remains outstanding. Trump’s order will pause the allocation of funds to ‘green projects’, particularly related to EVs, while funds targeting broader infrastructure should remain intact.

The key question is over the future of the manufacturing tax credits created by the IRA, which account for the bulk of its originally estimated $369 billion economic impact. Eliminating IRA tax credits would require Congress to pass legislation, which cannot be applied retroactively, and is unlikely given the number of beneficiaries in Republican congressional districts.

Tariffs, Tariffs, Tariffs

The rollback on domestic EV mandates and renewable energy aligns with a broader “re-de-prioritisation” of US involvement in global climate initiatives, but the (second) withdrawal from the Paris Agreement isn’t the only issue sparking international concern.

Trump’s combative trade policy has also taken centre stage, again.

His previous playbook of a bazooka implementation of tariffs on imports does not appear to be playing out in this (second) first week in office, but the uncertainty around ‘how much’ and ‘when’ has again become a risk factor for businesses and markets.

The President has hinted at a February 1st deadline for tariff decisions on China, Canada, and Mexico, while also targeting the European Union. Although campaign rhetoric suggested steep tariffs – to 60% on Chinese goods—Trump’s latest comments suggest a more measured 10% tariff on Chinese imports, at least initially.

Trump’s nomination for Treasury Secretary (Scott Bessent) has been cited as pro-tariff, but with an understanding of its inflationary impact and repercussions for financial markets. The nominee for US Trade Representative (Jamieson Greer) was involved in negotiations with China during the previous Trump administration, which ended with a reduction in tariffs and several exceptions, but China’s pledge to purchase $200 billion in US goods and services (which did not happen due to COVID-19).

For critical materials, China’s recent ban on exports of gallium, germanium and antimony is viewed as part of its opening position for negotiations with the US. Since the last Trump presidency, China has strengthened its ties with neighbouring countries, notably Russia, to build up mutually beneficial supply chains, particularly in critical materials and energy.

While China relies heavily on the US for economic performance (net exports to the US represented nearly 2% of China’s GDP in 2023), it has a strong advantage in its supply chain position and recent pace of technological advancements. Given the increasing awareness of critical materials at the federal level, this would have to be taken into consideration in any trade discussion.

Ultimately, the US continues to hold the largest trade deficit in the world at $2.5 trillion. In addition to China, the US remains an importer of critical materials from many countries, such as Canada, Australia, Russia, Chile and the DRC.

For President Trump, where he holds Executive Authority to impose tariffs under Section 232 (national security) or Section 301 (unfair trade practices), trade policy will remain an area where he can implement his ambitions quickly. However, it remains a delicate balancing act between ‘protecting American industry’ and inflating prices to the detriment of economic growth.

What comes next?

In his second term's opening week, President Trump set a clear course around energy dominance, critical materials, and a reshaped global posture. The weeks and months ahead will reveal whether and how these bold moves will reshape the US economy and its role in the international framework.

Project Blue's global team of analysts continue to monitor US government announcements and analyse their impact on critical materials and energy transition supply chains.

Our analysis, market forecasts and detailed advice support market participants across these supply chains with their strategic planning and investment decisions.

To speak to our experts to learn more, please email info@projectblue.com.