RARE EARTH METAL TARIFF?: White House Orders Section 232 Investigation Into Critical Minerals

Earlier last week the Trump Administration set into motion a process that could see more tariffs placed on a host of goods. On April 15, 2025, by executive order (the “Executive Order”), President Trump ordered an investigation pursuant to Section 232 of the Trade Expansion Act of 1962 into “critical minerals and their derivative products.”

What are “critical minerals”?

The Executive Order defines “critical minerals” as “those minerals included in the ‘Critical Minerals List’ published by the United States Geological Survey (USGS)…” The current USGS Critical Minerals List includes the following:

• Aluminum, used in almost all sectors of the economy
• Antimony, used in lead-acid batteries and flame retardants
• Arsenic, used in semi-conductors
• Barite, used in hydrocarbon production.
• Beryllium, used as an alloying agent in aerospace and defense industries
• Bismuth, used in medical and atomic research
• Cerium, used in catalytic converters, ceramics, glass, metallurgy, and polishing compounds
• Cesium, used in research and development
• Chromium, used primarily in stainless steel and other alloys
• Cobalt, used in rechargeable batteries and superalloys
• Dysprosium, used in permanent magnets, data storage devices, and lasers
• Erbium, used in fiber optics, optical amplifiers, lasers, and glass colorants
• Europium, used in phosphors and nuclear control rods
• Fluorspar, used in the manufacture of aluminum, cement, steel, gasoline, and fluorine chemicals
• Gadolinium, used in medical imaging, permanent magnets, and steelmaking
• Gallium, used for integrated circuits and optical devices like LEDs
• Germanium, used for fiber optics and night vision applications
• Graphite , used for lubricants, batteries, and fuel cells
• Hafnium, used for nuclear control rods, alloys, and high-temperature ceramics
• Holmium, used in permanent magnets, nuclear control rods, and lasers
• Indium, used in liquid crystal display screens
• Iridium, used as coating of anodes for electrochemical processes and as a chemical catalyst
• Lanthanum, used to produce catalysts, ceramics, glass, polishing compounds, metallurgy, and batteries
• Lithium, used for rechargeable batteries
• Lutetium, used in scintillators for medical imaging, electronics, and some cancer therapies
• Magnesium, used as an alloy and for reducing metals
• Manganese, used in steelmaking and batteries
• Neodymium, used in permanent magnets, rubber catalysts, and in medical and industrial lasers
• Nickel, used to make stainless steel, superalloys, and rechargeable batteries
• Niobium, used mostly in steel and superalloys
• Palladium, used in catalytic converters and as a catalyst agent
• Platinum, used in catalytic converters
• Praseodymium, used in permanent magnets, batteries, aerospace alloys, ceramics, and colorants
• Rhodium, used in catalytic converters, electrical components, and as a catalyst
• Rubidium, used for research and development in electronics
• Ruthenium, used as catalysts, as well as electrical contacts and chip resistors in computers
• Samarium, used in permanent magnets, as an absorber in nuclear reactors, and in cancer treatments
• Scandium, used for alloys, ceramics, and fuel cells
• Tantalum, used in electronic components, mostly capacitors and in superalloys
• Tellurium, used in solar cells, thermoelectric devices, and as alloying additive
• Terbium, used in permanent magnets, fiber optics, lasers, and solid-state devices
• Thulium, used in various metal alloys and in lasers
• Tin, used as protective coatings and alloys for steel
• Titanium, used as a white pigment or metal alloys
• Tungsten, primarily used to make wear-resistant metals
• Vanadium, primarily used as alloying agent for iron and steel
• Ytterbium, used for catalysts, scintillometers, lasers, and metallurgy
• Yttrium, used for ceramic, catalysts, lasers, metallurgy, and phosphors
• Zinc, primarily used in metallurgy to produce galvanized steel
• Zirconium, used in the high-temperature ceramics and corrosion-resistant alloys.

Additionally, the Executive Order covers “derivative products,” which are defined as:

…all goods that incorporate processed critical minerals as inputs. These goods include semi-finished goods (such as semiconductor wafers, anodes, and cathodes) as well as final products (such as permanent magnets, motors, electric vehicles, batteries, smartphones, microprocessors, radar systems, wind turbines and their components, and advanced optical devices).

“Processed critical minerals” are lastly defined as:

…critical minerals that have undergone the activities that occur after critical mineral ore is extracted from a mine up through its conversion into a metal, metal powder or a master alloy.

Therefore, the Executive Order covers a broad range of imported products. The scope of the order includes not only the minerals on the above list, but any products that contain these minerals as an input such as smartphones, semiconductors, and their parts.

What is a Section 232 Investigation?

Article 1 of the U.S. Constitution gives Congress the power to impose tariffs. This power, however, can and has been delegated to executive agencies, under the authority of the President. Section 232 of the Trade Expansion Act of 1962 (“Section 232”) (19 U.S.C. §§ 1862-1864) is one such delegation.

Section 232 is used to address trade related threats to national security, rather than to the U.S. economy. Compared to Section 301, Section 232 is relatively straightforward. The Secretary of Commerce handles investigations under Section 232. Investigations can be initiated by interested parties, any department or agency head, or by the Secretary of Commerce sua sponte. During the investigation, the Secretary of Commerce must consult with the Secretary of Defense and other officers of the United States, and hold a period for notice and comment by the public. The Secretary of Commerce generally has 270 days to determine whether the imports at issue are harming national security. Importantly, the Executive Order directs the Secretary to complete this particular investigation within 180 days.

If the Secretary of Commerce determines that the imports are harmful to national security, the President then has 90 days to review the determination. At the end of the 90 day period, the President must either reject the Secretary’s determination, or identify what steps will be taken to remedy the harm. The remedy is left solely to the discretion of the President, meaning that tariffs are a possibility. If the President agrees with the Secretary, he then has 15 days to implement the remedy.

Section 232 was previously successfully used by the first Trump Administration to impose a 25% tariff on steel and aluminum imports.

Investigation Into Critical Minerals and Derivative Products

This Executive Order means that additional tariffs on goods made from aluminum, tin, zinc, and other materials on the above list could be seen in the near future. The Secretary will conduct research to determine whether U.S. national security is currently being harmed by the importation of such goods into the United States. During the investigation, there will be a period for notice and public comment. Critical minerals and derivative product manufacturers, importers, purchasers, and any other interested party will be allowed to participate in the process by submitting arguments, evidence, and data.

At the end of the investigation, the Secretary may find that these imports are harming U.S. national security. In that case, the President would have the authority to adopt a remedy within 90 days. Based on the policy preferences of the current administration, the remedy would most likely be tariffs. There is no telling at this stage what a likely tariff rate would be.

Conclusion

In summary, the Executive Order could mean that additional tariffs on critical minerals and their derivative products, including semiconductors, are on the way. Additionally, the usual process appears to have been expedited so as to reach a conclusion more quickly. The investigation will include notice and comment from any interested parties, giving members of the trade community a valuable platform to potentially influence the outcome of the investigation. Because an affirmative determination could mean more tariffs, it is important to watch the ongoing investigation closely.

If you believe that your company may be an interested party to the Section 232 investigation, Liang + Mooney, PLLC can help. Feel free to contact us to schedule a consultation.