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US, Australia sign historic deal to secure rare earth minerals and counter China

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US President Donald Trump has signed a historic agreement with Australian Prime Minister Anthony Albanese to increase America’s access to rare earth elements and other critical minerals.

This agreement was made to counter China’s tight control over the supply chains of essential metals.

The two governments will jointly invest in a series of mining and processing projects in Australia to boost the production of commodities used in advanced technologies, from electric vehicles and semiconductors to fighter jets.

Albanese noted that Australia has a “ready pipeline” of $8.5 billion, while Trump, during the two leaders’ meeting at the White House, said, “In about a year, we will have so many critical minerals and rare earths that you won’t know what to do with them.”

Washington has been in a dispute with the Asian giant over rare earth elements since Beijing imposed restrictions on the export of these materials earlier this year, countering Trump’s trade offensive.

The expectation of further tightening supplies has spurred America’s efforts to build alternative production capacity, although industry executives and analysts warn that replacing the vast network of mines and refineries will not be a quick process.

The leaders stated that the agreement will also cover the processing of Australia’s rare earth elements and other critical minerals. Albanese added that Australia has the “capacity” to expand these efforts.

According to the text of the agreement distributed by Albanese’s office, the US and Australia are committed to protecting their domestic markets from “unfair trade practices,” including adopting trade standards that involve “price floors or similar measures.”

“This is the most significant bilateral mining collaboration we have seen between two major Western countries,” said Gracelin Baskaran, a director who works on critical minerals at the Center for Strategic and International Studies, in a phone statement. “Today’s announcement truly shows that the US is not trying to tackle critical minerals alone. It is trying to find the right partners.”

The Australian prime minister said on Tuesday that the deal, which has caused a major increase in Australia’s rare earth and critical mineral stocks, will begin with the US and Australia paying more than $1 billion for the first projects over the next six months, with some other projects in both countries as well.

The document does not include details on which organizations will provide this financing.

Rare earth elements are a subset of critical minerals. Even before the recent export controls, China had imposed restrictions on the supply of vital inputs such as gallium, germanium, and antimony.

According to the White House, the Pentagon will provide financial support for the construction of the Alcoa-Sojitz gallium refinery planned in Western Australia, with an annual capacity of 100 tons, as part of the agreement.

The US Ex-Im Bank is also issuing letters of intent to provide more than $2.2 billion in financing for critical mineral projects.

This meeting, Albanese’s first visit to the White House since Trump returned to power, comes at a time when the Australian leader is trying to strengthen relations with the US by using his country’s mineral wealth as leverage.

As China’s rare earth export restrictions shake economies worldwide, US Treasury Secretary Scott Bessent said last week that allies, including Australia, were in discussions on a joint response.

Australia, which has the world’s fourth-largest reserves of rare earth elements, has long sought to be an alternative to China for the supply of materials vital for semiconductors, defense technology, renewable energy, and other sectors.

The country is also home to the only producer of heavy rare earth elements outside of China, through Lynas Rare Earths.

Efforts to secure the deal had already begun before Albanese’s visit. According to people familiar with the talks, more than a dozen Australian mining companies held meetings with officials from various agencies in Washington last month, and it was said that the US was looking for ways to obtain equity-like stakes in companies as part of a broader strategy to develop supply chains to compete with China.

Australian Treasurer Jim Chalmers met with US investors from companies like Blackstone and Blue Owl Capital in New York last week, promoting his country as a stable, resource-rich destination for global capital and a key partner in efforts to diversify critical supply chains.

Confidence is growing that Australia and the US will begin talks on how Canberra can secure its rare earth shipments and how the US can strengthen its capacity.

This belief has fueled investor enthusiasm, and shares of mining companies like Lynas have gained over 150% in the last 12 months.

Trump also said the two leaders discussed “trade, submarines, and many other military equipment,” and that national security issues were high on the agenda.

The US president has pushed Canberra to increase its defense spending from the current level of around 2% to 3.5% of its gross domestic product, but Australia has so far resisted this demand.

The White House announced that Australia has agreed to purchase $1.2 billion worth of underwater drones and will take delivery of the first batch of Apache helicopters under a separate $2.6 billion deal.

Another important issue is the sale of five nuclear-powered Virginia-class submarines by the US to Australia in the early 2030s under the AUKUS agreement.

Australia and the United Kingdom will later design and build a new generation of submarines, partly using American technology, which is planned to be completed in the 2040s.

The AUKUS agreement was signed in 2021 by former President Joe Biden’s team to counter China’s military expansion in the Indo-Pacific region.

The submarine deal is at the center of the countries’ collective security agreement, but according to the Pentagon, the Trump administration is reviewing the deal to determine if it is “compatible with the President’s America First agenda,” which raises concerns that Trump might abandon the agreement.

However, Australian and UK officials have downplayed this possibility. Trump, for his part, indicated on Monday that he plans to proceed with the submarine sales.

In response to a question about accelerating the sales, Trump said, “We’re doing it. We have the best submarines in the world, and we are building a few more right now. We are starting now, we have arranged everything with Anthony.”

The US president also praised the military cooperation between the two allied nations.

Still, Trump implied he would not offer the tariff reduction that Canberra has requested as a country with a trade deficit with the US. Trump has imposed a 10% tariff on Australian goods, which is the base rate the president applies to the products of many other countries.

“Australia pays very low tariffs, very, very low tariffs,” Trump said.

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Pentagon plans covert spy ring for economic war on China, report says

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The US Department of War (Pentagon) is reportedly planning to establish an extensive network of deep-cover agents to wage economic warfare against China and other adversaries of the US.

According to a report by The Washington Post citing six sources familiar with the initiative, the plan has not yet been put into effect. The newspaper reported that the initiative remains at the planning stage. The Pentagon, however, denies that any such initiative exists.

The report said the operatives would pose as entrepreneurs or private sector employees while concealing their ties to the US government. The network’s mission would be to gather economic intelligence and counter China.

The programme is led by Tom Rakusa, who spent 39 years at the CIA. Rakusa serves as a senior adviser to Deputy Secretary of Defence Steve Feinberg.

The proposed spy network is seen as part of a broader policy by the Donald Trump administration to sharpen economic competition with other countries.

The US is already resorting to tariffs, export controls, and investment in strategic sectors, alongside expanding its economic intelligence gathering.

According to The Washington Post, the new initiative demonstrates the Pentagon’s growing influence under the Trump administration. The department is currently seeking a record budget of $1.5 trillion.

Trade war flares up again with Trump’s return to the White House

The trade friction between the US and China flared up again following Donald Trump’s return to the White House. In April 2025, Washington raised tariffs on Chinese goods to as much as 145%, and Beijing retaliated with tariffs of up to 125%.

In May, US Secretary of State Marco Rubio described China as the primary geopolitical challenge facing Washington. Rubio said that to avoid war, the two sides needed to manage their conflict of interests.

In July, Chinese expert Zheng Yongnian did not simply warn that underestimating the US could prove to be a “fatal mistake”; he stated it explicitly.

According to Zheng’s assessment, the US maintains its primacy through the role of the dollar, its military superiority, and its technological advantages.

Even so, the two sides agreed in June to declare a truce and lower tariffs. In autumn 2026, the US and China extended their trade truce until 10 January 2027.

US Treasury Secretary Scott Bessent said the extension would give the parties more time to discuss economic issues.

Trade deals do not eliminate the strategic contradictions between the two countries. Financial Times columnist Rana Foroohar likened the race between the two nations for commercial, technological, and geopolitical influence to the 19th-century “Great Game” between the Russian and British empires.

Foroohar cited China’s standing in shipbuilding and commercial maritime transport, as well as its expanding footprint in overseas ports, among its key advantages.

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Japan plans curbs on short-term home sales to cool urban prices

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Japan’s ruling Liberal Democratic Party (LDP) plans to restrict short-term property trading to rein in surging home prices in major urban centres, particularly Tokyo.

Led by Prime Minister Sanae Takaichi, the party aims to make support for working households a core priority ahead of local elections scheduled for April next year.

The LDP’s research commission on housing and land policy met on Wednesday to discuss the issue.

According to a report by the Nikkei Asia newspaper, Commission Chair and LDP lawmaker Midori Matsushima said at the opening of the meeting: “Prices of newly built condominiums across Tokyo’s 23 wards have doubled over the past decade. We must work on measures ensuring that people who wish to live in these homes can actually afford to buy them.”

Homeownership in the capital has become virtually unattainable for broad segments of the population. According to data from the Real Estate Economic Institute, the average sale price of a newly built condominium in Tokyo’s 23 wards rose %18.5 in fiscal 2025 compared with the previous year, reaching 137.84 million yen (around $872,000).

Meanwhile, statistics from the Ministry of Labour show that the average annual income of a full-time worker in the capital remained at 6.78 million yen in fiscal 2025. This widening gap between incomes and residential property prices is directly shaping political priorities.

During its campaign for the House of Representatives election in February, the LDP pledged to curb speculative transactions across metropolitan Tokyo and other regions. Earlier this month, a party project team focused on policies concerning foreign nationals also submitted a recommendation urging the government to introduce immediate tax measures against rising home prices.

Under current legislation, profits realized from properties sold within five years of acquisition are classified as “short-term capital gains”. These returns face a tax rate approaching %40, including income tax and local inhabitant tax.

Although this rate is twice the approximately %20 levied as “long-term capital gains” tax on properties held for more than five years, several party members argue it remains insufficient to deter speculation. Calls to tighten the framework may be considered as part of the annual tax reform package to be drafted in December alongside the LDP’s coalition partner, the Japan Innovation Party.

The ruling bloc wants to present concrete housing pledges to voters heading to the polls in April across numerous urban centres, including 22 of Tokyo’s wards where local assembly terms expire.

“We need to support families with children, who are typically at the stage of purchasing a home,” a senior LDP official said.

Opposition parties are also preparing alternative proposals that target not only prospective homebuyers, but also residents forced into the rental market by high property prices and now affected by escalating rents.

Tax steps take precedence over limits on foreign buyers

Several countries seeking answers to housing affordability pressures have imposed direct restrictions on foreign purchasers. In South Korea, real estate policies played a major part in the declining public approval ratings of President Lee Jae Myung.

In August 2025, authorities in Seoul introduced an approval requirement for foreign nationals buying homes in the capital and adjacent areas, while also mandating that buyers reside in the properties for at least two years.

Canada and Australia have enacted temporary bans on foreign residential purchases, while Singapore levies a %60 additional stamp duty on foreign buyers.

The role of overseas investors in Japan’s property market also drew debate during the February election. However, restrictions aimed directly at foreign nationals are viewed as potentially conflicting with international trade and services agreements.

Consequently, rather than imposing restrictions based on the nationality of buyers, the government is discussing tax measures aimed at speculative real estate deals, such as rapid resales.

Fears that sharp market measures could shake regional banks

Concerns have also surfaced that aggressive steps to force down prices could harm the wider national economy.

A senior LDP tax official cautioned that a steep drop in land prices could weaken local financial institutions, warning: “We must consider the impact on regional banks.”

The real estate sector accounts for roughly %18 of total lending by Japanese banks. This proportion sits well above the %10 level recorded during Japan’s bubble economy of the mid-to-late 1980s.

At certain regional banks, property lending accounts for nearly half of total loan portfolios.

According to March 2025 data from the Financial Services Agency, approximately one-quarter of all loans extended by regional banks to the real estate sector are concentrated directly in Tokyo’s five central wards.

Buoyant asset valuations, supported in part by rising stock indices, have underpinned strong public approval for the Takaichi administration. Observers note that property interventions designed to cool the market could drag down equity prices and weaken the government’s standing.

A senior official on the LDP research commission stressed that decision-makers must act with caution regarding the scope and timing of any measures intended to bring price increases under control.

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South Korea plans $120B spend on eight US nuclear power plants

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South Korea will spend $120 billion to construct eight nuclear power plants in the US under an agreement that provides for $350 billion in investments in exchange for lower tariffs.

The South Korean government also announced that Seoul and Washington will begin examining a liquefied natural gas (LNG) project in Alaska comprising a large-scale pipeline to transport natural gas from the north of the state to the south, alongside the construction of an LNG terminal for exports overseas.

Seoul stated that a decision regarding the LNG project will be made following a commercial feasibility study. However, US President Donald Trump said that South Korea would invest $54 billion in the project, pointing to an apparent lack of full coordination between the two sides on the matter.

Trade and Industry Minister Kim Jung-kwan said in a statement: “This announcement opens a new horizon of cooperation where the two countries join forces to develop joint commercial ventures in strategic areas directly linked to economic security and future sectors such as artificial intelligence, nuclear energy, and LNG.”

“We will adhere to the principle of prioritising national interests and investing solely in commercially viable projects,” Kim said.

Speaking at the White House, Trump characterised South Korea’s plans as “one of the largest energy infrastructure investments in American history”.

The announcement followed a meeting between Trump and South Korean President Lee Jae Myung roughly one year ago at the APEC Economic Leaders’ Meeting held in South Korea, where they agreed on the creation of a $350 billion investment fund.

Under that agreement, $150 billion was allocated to the shipbuilding sector and $200 billion to other sectors. In return, the US announced it would reduce tariffs imposed on goods imported from South Korea from 25% to 15%.

Under the nuclear power project, South Korea’s state-controlled utility will build two plants in the US, while Pennsylvania-based Westinghouse Electric will construct six plants.

According to the South Korean government, this will mark the first instance in which a foreign country builds its own nuclear power plants in the US.

South Korean firms are also evaluating the possibility of acquiring a stake in Westinghouse as part of negotiations over sharing profits generated by the project.

South Korea additionally announced that it will build a $22.3 billion natural gas-fired power plant in Texas with a capacity of 6,472 megawatts.

The facility will be designed to supply electricity directly to nearby data centres. The project’s first phase is targeted to begin commercial operations in 2029, with full-capacity operations slated for 2032.

Seoul also disclosed that it had agreed to allow the US to receive 50% of the profits generated by the projects until South Korea recoups all of its investments.

After South Korea fully recovers its total investment amount, 90% of the profits will go to the US.

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