Shares of companies producing rare earth minerals surged Monday as JPMorgan announced a decade-long $1.5 trillion “Security and Resilience Initiative” aimed at investing in industries like artificial intelligence, manufacturing and critical minerals—and surely to curry favor with President Trump, who has urged major entities to invest in his “America First” economic agenda.
JPMorgan announced a new "Security and Resilience Initiative” aimed at investing in industries it deems vital to U.S. national security, including taking $10 billion in direct stakes in select companies.
The company says the initiative will focus on four key industries: Supply chain and advanced manufacturing, defense and aerospace, energy independence and resilience and frontier and strategic technologies, which are then further broken down into 27 sub-industries.
Shares of companies producing rare earths surged following the announcement – USA Rare Earth Inc. spiked 32%, MP Materials Corp. rose 24% and Lithium Americas Corp climbed 11%.
The announcement adds another $500 million to the $1 trillion JPMorgan said it had already set aside to support clients in areas like aerospace, energy and defense.
The Trump administration has been increasing its efforts to strengthen its stake in sectors like critical minerals as it continues to lock horns with China in trade negotiations.
Crucial Quote
“It has become painfully clear that the United States has allowed itself to become too reliant on unreliable sources of critical minerals, products and manufacturing—all of which are essential for our national security,” said Jamie Dimon, Chairman and CEO of JPMorganChase.
Key Background
JPMorgan’s commitment is a nod to the White House’s “America First” agenda – seeking to ensure U.S. independence in emerging technology, energy and critical infrastructure. Rare earth minerals used to make crucial technologies are a key industry that gives China leverage over the U.S. in trade discussions. As recently as last week, China implemented export controls on rare earth minerals as a negotiation tactic, prompting the Trump administration to impose additional tariffs of 100% on U.S.-bound goods from China. China dominates the market for rare earths, producing around 70% of the world’s supply. In March, the president signed an executive order to expand American production of critical minerals and rare earths, invoking wartime emergency powers. To combat reliance on foreign supply of these minerals, the U.S. government has begun taking equity stakes in companies like rare earth manufacturer MP Materials, mining company Trilogy Metals, and semiconductor giant Intel in the past few months.
Bank, Companies Pledge to Trump’s ‘America First’
The Trump administration’s “America First” agenda, which ordered a comprehensive review of U.S. trade policy, has prompted many Wall Street giants to pledge investments in U.S. domestic manufacturing. SoftBank’s Masayoshi Son announced a $100 billion investment pledge to ramp up U.S. domestic development in AI and other critical infrastructure projects. Apple and Nvidia have also announced similar plans to increase their U.S. manufacturing outputs.
Contra
As The New York Times DealBook puts it, “Critics of such plans have questioned how many of these corporate mega-promises will be fulfilled, and said they appear tailored in part to win points with Trump.”
Further Reading