TOKYO, Japan: U.S. President Donald Trump and Japanese Prime Minister Sanae Takaichi signed a landmark agreement on October 28 to secure supplies of rare earths and other critical minerals, a move aimed at reducing both nations' dependence on China ahead of Trump's expected meeting with Chinese President Xi Jinping later this week.

The deal was inked at Tokyo's ornate Akasaka Palace, under gold-trimmed chandeliers as aides applauded. While neither leader mentioned China directly, Beijing's dominance in processing more than 90 percent of the world's rare earths loomed large over the talks.

The new U.S.-Japan framework focuses on developing "diversified, liquid and fair markets" for critical minerals, according to the White House, and will include coordinated investments and financing for selected projects within six months. The countries will also explore joint stockpiling and seek partnerships with other allies to strengthen global supply chains.

Trump and Xi are scheduled to meet on October 30 on the sidelines of the Asia-Pacific Economic Cooperation (APEC) summit in South Korea. They are expected to discuss easing U.S. tariffs and China's export curbs on rare earths.

"The agreement signals the U.S. and Japan's intent to build secure, transparent mineral supply chains outside of China," said a person familiar with the negotiations.

While China dominates rare earth processing, the U.S. and Myanmar account for 12 percent and eight percent of global extraction, respectively, while Malaysia and Vietnam contribute smaller shares, according to Eurasia Group data.

The minerals accord also ties into Japan's broader US$550 billion investment pledge in the U.S., part of a broader trade framework that spans energy, semiconductors, and infrastructure. Sources said the package could include liquefied natural gas (LNG) and power generation projects.

Energy cooperation featured prominently in discussions, as the U.S. urged allies to curb Russian imports after imposing sanctions on oil giants Rosneft and Lukoil to pressure Moscow over the war in Ukraine.

Japan has sharply increased U.S. LNG purchases in recent years to diversify from Australia and offset potential shortfalls from Russia's Sakhalin-2 project. The project currently supplies about 9 percent of Japan's gas needs. Contracts for most Sakhalin-2 deliveries expire between 2028 and 2033.

In June, JERA, Japan's largest LNG buyer, agreed to import up to 5.5 million metric tons per year of U.S. LNG starting around 2030 — roughly matching its annual Sakhalin-2 volume. Tokyo Gas has since followed with a preliminary deal to buy 1 million tons per year from the Alaska LNG project.

Despite U.S. pressure to phase out Russian energy, Japanese officials say Sakhalin gas remains the cheapest and fastest to deliver.

"The U.S. wants Japan to stop importing Russian LNG, but can it offer gas as affordable and nearby?" asked Nobuo Tanaka, CEO of Tanaka Global Inc. "Alaska and the Gulf Coast are much farther, and that adds cost."