Trump and Albanese Sign $3 Billion Rare Earth Deal Amid U.S.-China Tensions

President Donald Trump and Australian Prime Minister Anthony Albanese signed a $3 billion rare earth minerals deal to strengthen trade and defense ties amid U.S.-China tensions. They also discussed the AUKUS submarine pact, though analysts note skepticism in Australia about Trump’s reliability and the future of the alliance.

President Donald Trump and Australian Prime Minister Anthony Albanese met at the White House on Monday, where they signed a new agreement on rare earth minerals — a deal that could become a powerful bargaining tool as the United States continues to navigate its trade tensions with China. The signing took place at the beginning of their meeting, which Trump told reporters had “been negotiated over a period of four or five months.” He described the timing as fortuitous, saying, “We got it done just in time for the visit. We’ve been working together very much on rare earths, critical minerals, and lots of other things, and we’ve had a very good relationship. We’ve been working on that for quite a while.”

Albanese emphasized Australia’s readiness to move forward, noting that his country has an $8.5 billion investment pipeline “ready to go” for the deal. According to a White House official, both the U.S. and Australian governments plan to invest more than $3 billion jointly in critical mineral projects within the next six months. The projects are estimated to hold recoverable resources valued at over $50 billion, a reflection of the growing global race to secure access to materials essential for the manufacture of advanced electronics, renewable energy systems, and defense technologies.

When asked whether the U.S. intended to lift tariffs on Australian goods, Trump avoided a direct answer but praised his own trade policies before adding, “I will say this, Australia pays very low tariffs, very, very low tariffs. Australia pays among the lowest tariffs.”

Beyond economic cooperation, both leaders are also expected to discuss a range of strategic issues, including defense cooperation, Indo-Pacific security, and the future of the AUKUS nuclear submarine deal. Albanese’s office stated on Sunday that the meeting would focus on strengthening the alliance and ensuring stability in the region. The Australian leader, whose center-left government was re-elected in May for a second term, said he looked forward to a “positive and constructive” meeting with Trump.

Despite the close alliance between the two countries, Australia has not featured prominently in Trump’s second administration. With a population of around 27 million, Australia maintains a large trade deficit with the United States, earning it one of the lowest tariff rates of 10 percent. Emma Shortis, director of the Australia Institute’s International and Security Affairs Program, remarked that “Australia is not particularly high on Trump’s agenda,” but noted that the rest of the world would be watching closely “to see how Trump treats a traditional ally.”

For Albanese, Shortis suggested, the primary goal would be to ensure that the meeting “isn’t a disaster,” referencing the tense encounters Trump previously had with other world leaders, including Ukrainian President Volodymyr Zelenskyy and South African President Cyril Ramaphosa, during his earlier administration.

Australia’s vast reserves of critical minerals have gained renewed significance as U.S.-China competition intensifies. Rare earth minerals are indispensable components in high-tech manufacturing, from smartphones to electric vehicles and advanced military equipment. China, which dominates global production and processing, recently announced new export controls viewed by many as an attempt to tighten its grip on the global supply chain.

“We know that American companies desperately need critical minerals, and Australia is very well placed to service that need,” Australian Treasurer Jim Chalmers said during a press briefing in Washington on Friday.

Still, some in Australia expressed concern that it took nine months for an official meeting between the two leaders to occur, even though they briefly spoke on the sidelines of the United Nations General Assembly in New York last month.

There is also unease among sections of the Australian public about the meeting itself. Australians have long been among the most skeptical of Trump among U.S. allies. According to a Pew Research Center survey conducted during the first months of Trump’s current term, 77 percent of Australian respondents said they had “no confidence” in him to do the right thing in world affairs. A separate poll released by the Australia Institute in May revealed that more than 54 percent of respondents favored a more independent foreign policy rather than a closer alignment with the U.S. — a rise of 10 percentage points compared to two months earlier, shortly after Trump returned to office.

While support for the U.S.-Australia alliance remains strong, there are growing concerns about America’s democratic stability. “If the United States is not seen as a democracy or a nation of laws, then the alliance with the United States will come into question,” said Brendon O’Connor, a professor of U.S. politics and foreign relations at the United States Studies Centre at the University of Sydney.

Albanese recently took a different path from Washington by formally recognizing a Palestinian state, a move that was welcomed in many parts of the world but noted in Washington as a sign of divergence. Although the Australian leader praised Trump for brokering a ceasefire in the Israel-Hamas conflict, experts suggest he will take care not to appear overly deferential to Trump on sensitive topics such as democracy, authoritarianism, and domestic dissent.

One major issue expected to dominate their talks is the AUKUS security pact — a $240 billion trilateral agreement under which Australia plans to acquire U.S.-made nuclear-powered submarines by 2032 before jointly developing a new class with the United Kingdom. While Australian officials have expressed confidence that the deal will proceed, it is currently under review by the Trump administration amid concerns that the U.S. Navy may not have the capacity to produce enough submarines for both its own fleet and Australia’s.

Australian Defense Minister Pat Conroy confirmed last week that Canberra would soon make its second of three billion-dollar payments intended to help accelerate U.S. submarine production. Still, O’Connor voiced skepticism about the long-term viability of the deal, saying, “There’s reason to be pretty skeptical about whether those submarines will ever arrive. And it’s not just up to Trump — six months before delivery in the 2030s, the United States could decide it doesn’t have enough submarines to sell Australia three or four.”

Some analysts in Australia have speculated that Albanese might seek to win Trump’s backing for AUKUS by offering additional cooperation on critical minerals. However, Shortis was doubtful such an approach would succeed. “Trump’s word on any issue like this is not particularly reliable and can change very quickly,” she said. “It doesn’t matter what you offer Trump — it’s never going to be enough.”