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The United States has announced a nearly $12 billion critical mineral reserve, a strategic move designed to reduce its dependence on China for materials vital to modern industry. Dubbed "Project Vault," the initiative aims to protect American manufacturers from supply chain disruptions.

At the White House on Monday, Donald Trump introduced the project, explaining its goal is to "ensure that American businesses and workers are never harmed by any shortage." He drew a parallel between this new stockpile and the Strategic Petroleum Reserve, which was established in the 1970s following the disruptive Arab oil embargo.

Understanding Project Vault's Funding and Scope

Project Vault will be financed through a combination of public and private funds, including a $10 billion loan from the U.S. Export-Import Bank and approximately $1.67 billion in private capital. The government-backed loan has a 15-year term, and the president expressed optimism that the government would profit from it.

The reserve will stockpile minerals essential for producing a wide range of goods, including vehicles, electronics, jet engines, and radar systems. This is intended to shield U.S. industries from the kind of supply pressures experienced during past trade disputes.

According to Secretary of the Interior Doug Burgum, 11 more countries will be announced as partners in the initiative later this week.

Responding to China's Market Dominance

The creation of the reserve is a direct response to China's overwhelming control of the global rare earths market. China currently controls about 70% of the world's rare earths mining and an estimated 90% of the processing capacity.

This dominance gives Beijing significant leverage, which it has used before. During trade talks last year, China restricted exports of rare earths needed for everything from electric vehicles to smartphones. "We don't want to ever go through what we went through a year ago," Trump said, referencing the confrontation with China.

This strategic vulnerability has prompted the U.S. to cultivate alternative sources and establish a national stockpile for these crucial elements. The U.S. government has previously supported the sector by taking stakes in miners like MP Materials and providing financial backing to firms such as Vulcan Elements and USA Rare Earth.

A Diplomatic Push for Secure Supply Chains

The strategic reserve is set to be a central topic at an upcoming ministerial meeting on critical minerals. Hosted by Secretary of State Marco Rubio at the State Department on Wednesday, the event will feature a keynote address from Vice President JD Vance.

Officials from dozens of nations across Europe, Africa, and Asia are expected to attend. The meeting is also anticipated to feature the signing of several bilateral agreements aimed at improving and coordinating supply chain logistics. A statement from the State Department noted the gathering "will create momentum for collaboration" to secure reliable access to rare earths.

The announcement of Project Vault was made in the Oval Office with General Motors CEO Mary Barra and mining billionaire Robert Friedland, alongside members of the administration and congressional leaders.

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Chinese President Xi Jinping met with his Uruguayan counterpart, Yamandu Orsi, in Beijing on Tuesday, calling for the two nations to jointly promote an "equal and orderly multipolar world." In remarks reported by a media pool, Xi also advocated for an inclusive and universally beneficial economic globalization, framing the cooperation as part of building a "community with a shared future for mankind."

Orsi's trip marks the first visit to the Chinese capital by a South American leader since the United States' invasion of Venezuela in January, which involved the capture of then-President Nicolas Maduro.

Geopolitical Context and Symbolism

The high-level meeting follows a series of visits to China by Western leaders this year, including Britain's Prime Minister Keir Starmer, Canadian Prime Minister Mark Carney, and Finland's Prime Minister Petteri Orpo.

According to Francisco Urdinez, a professor at the Pontifical Catholic University of Chile, the timing holds symbolic weight. "For Beijing, hosting Orsi signals that South American countries remain eager to engage, despite the increasingly polarized geopolitical environment," Urdinez explained.

Orsi, who arrived in Beijing on Sunday, stated his visit aims to "empower Uruguay in the world and generate opportunities, investment and development." He is leading a 150-person delegation, which includes business leaders, on a tour that runs until February 7 and will also include a stop in the commercial hub of Shanghai.

The Economic Bedrock of the Relationship

The diplomatic push is built on a strong trade foundation. In 2025, China was the primary destination for Uruguayan exports, which are dominated by agricultural products such as wood pulp, soybeans, and beef.

The economic data highlights a robust partnership:

• Uruguay recorded a trade surplus of $187.1 million with China in the first half of 2025.

• In return, the South American nation imports machinery, electronics, and chemicals from China.

New Agreements Target Deeper Cooperation

On Tuesday, the two countries signed a joint declaration to deepen their strategic partnership, alongside 12 other cooperation documents. These agreements cover a range of sectors, including science and technology, environmental cooperation, meat exports and imports, and intellectual property.

Orsi expressed Uruguay's desire to intensify "trade in goods, especially through diversification, and to invest much more strongly in the area of trade in services and investment." He described the China-Uruguay strategic partnership as being in "its best moment," adding that both countries have a responsibility to "commit to raising it to a new level."

Experts see significant room for growth beyond traditional exports. Dr. Diego Telias, a professor at Universidad ORT Uruguay and a researcher at ICLAC, noted that sectors like dairy hold considerable potential. He also pointed to a gap in service exports, an area "in which Uruguay has successfully engaged with markets such as the United States, the United Kingdom and Europe, but not yet with China."

Just as Japan seemed to be stabilizing its falling currency, Prime Minister Sanae Takaichi introduced a fresh wave of uncertainty with off-the-cuff remarks that appeared to favor a weaker yen.

During a campaign speech this week, Takaichi—who is widely expected to win this Sunday's snap election—triggered a yen selloff by highlighting the benefits of a devalued currency. While she later retracted the comments, government officials privately worry the mixed signals could derail a coordinated effort with Washington to support the yen.

The weak yen has become a major political issue. At home, it is blamed for driving up the cost of imports. Abroad, the Trump administration has voiced concerns that it could destabilize U.S. markets.

Tokyo Scrambles for Damage Control

Takaichi's remarks quickly caused alarm within her own administration. According to one official at the prime minister's office, a scramble ensued over the weekend to contain the market fallout.

"Officials were scrambling to respond through Takaichi's X social media account to clarify her intentions," the official stated.

In a post on her X account on Sunday, Takaichi clarified that she had no preference for the yen's direction. She explained that her earlier speech was meant to convey her goal of building an economy resilient to exchange-rate fluctuations.

Another official confirmed that the government ensured U.S. authorities were informed of Takaichi's clarification. So far, Washington has not publicly commented on the matter.

Contradicting Official Policy

The prime minister's initial comments stood in stark contrast to the government's official stance. After weeks of heavy downward pressure, close coordination between Tokyo and Washington—including rare rate checks by the New York Federal Reserve—had finally helped steady the yen.

Finance Minister Satsuki Katayama has repeatedly threatened market intervention to prop up the currency. She has also noted that U.S. Treasury Secretary Scott Bessent shares her concerns over the yen's excessive volatility.

Masafumi Yamamoto, chief currency strategist at Mizuho Securities, said Takaichi's remarks exposed a deeper view. "It revealed a complete lack of a sense of crisis over the historically weak yen," he commented. "Instead, it laid bare that Takaichi's long-held belief that yen depreciation is beneficial to the economy remains unchanged."

Following the prime minister's speech, the yen gave up approximately half of the 7-yen gain it had recently made on the prospect of joint U.S.-Japan intervention.

Washington's Unwelcome Surprise

U.S. officials have been wary of the side effects of yen weakness, particularly the surge in Japanese government bond yields. According to Tsuyoshi Ueno, a senior economist at the NLI Research Institute, Washington is concerned that rising Japanese yields could ripple through U.S. markets, pushing up Treasury yields and triggering selloffs in American assets.

"From Washington's perspective, the remarks were also likely unwelcome," said Ueno.

Japanese government sources revealed that at a meeting in Davos, Treasury Secretary Bessent told Finance Minister Katayama that Japan's rising debt yields had triggered a "triple selloff" in the United States and urged Tokyo to respond. This bond rout in Japan, initially sparked by Takaichi's campaign pledge to waive sales tax on food, added to market volatility already stirred by President Donald Trump's trade threats against Europe.

The U.S. Treasury Department did not respond to a request for comment.

A Pattern of Off-the-Cuff Remarks

This is not the first instance of Prime Minister Takaichi making unscripted comments that diverge from carefully crafted policy. Weeks after taking office in October, her remarks in parliament on a hypothetical Chinese attack on Taiwan ignited a major diplomatic dispute with Beijing.

However, this candid style is also a source of her popularity, particularly among younger voters. A recent Asahi newspaper survey shows Takaichi's Liberal Democratic Party is on track for a landslide victory in the upcoming election, suggesting her approach of pursuing significant spending and tax cuts is likely to continue.

One government official, who wished to remain anonymous, expressed frustration with the prime minister's communication. "I read the whole of Takaichi's campaign speech, but I honestly wonder whether it needed to be said in the first place," he noted. "She rambled on, off the cuff without notes, but it's ultimately unclear what she was trying to say."