According to Forbes, the Trump administration has been aggressively pursuing rare earth element deals globally, securing agreements with Japan, Malaysia, Thailand, and Australia while discussing potential arrangements with Central Asian nations. Azerbaijan recently joined the Central Asian bloc, creating a C6 corridor that strategically positions it between Russia and Iran while offering significant crude oil exports and rare earth deposits. However, Section 907 of the 1992 FREEDOM Support Act prohibits direct U.S. aid to Azerbaijan due to its blockade of Armenia during the first Nagorno-Karabakh War. President Trump waived this provision in August during a White House meeting where Azerbaijan and Armenia signed a peace declaration, and the U.S. secured exclusive 99-year rights to construct rail, oil, gas, and fiber optic lines between the two countries. These developments come as China maintains dominance over rare earths, controlling two-thirds of global mining and nearly 90% of processing capacity.
Geopolitical Chess Game
Here’s the thing about Section 907 – it’s a perfect example of how Cold War-era legislation can come back to haunt modern strategic interests. The law made sense in 1992 when the Soviet Union had just collapsed and Azerbaijan was blockading Armenia. But now? We’re in a completely different world. Russia’s invading Ukraine, China dominates critical minerals, and Central Asian nations are actively looking Westward to avoid being pulled into Chinese or Russian spheres.
And Azerbaijan joining the Central Asian bloc changes everything. Basically, you’ve got this new C6 corridor that can reach the West through the Caucasus while potentially blocking Russian transit to Iran. That’s huge for regional power dynamics. But Section 907 creates this awkward situation where the U.S. wants Azerbaijan’s resources and strategic position but can’t officially provide direct aid. So we keep waiving it – first Bush for the War on Terror, then Biden, now Trump.
Rare Earth Reality Check
Let’s talk numbers because they’re staggering. China controls 90% of rare earth processing. Ninety percent! The U.S. is in distant second place at just 12% of global production. That’s not just a gap – it’s a chasm. And when you’re talking about minerals essential for everything from smartphones to fighter jets, that dependence becomes a national security nightmare.
So what’s the administration doing? Trump’s been on a rare earth shopping spree – deals with Japan, Malaysia, Thailand, Australia, even Ukraine and African nations. But Azerbaijan represents something special. It’s not just about their oil reserves (which the International Energy Agency calls “one of the highest energy self-sufficient ratios in the world”). They’ve got significant rare earth deposits too. And their location? Perfect for infrastructure projects that could bypass Russia entirely.
The Waiver Dance
The Armenian-American community has fought these waivers tooth and nail, and honestly, you can understand why. From their perspective, waiving Section 907 rewards Azerbaijani aggression. The Senate even passed the Armenian Protection Act in 2023 that would have blocked military aid and prevented waiver renewals in 2024-2025. But it never made it through the House.
Now here’s where it gets interesting. That August White House meeting wasn’t just about waiving Section 907. Azerbaijan and Armenia signed a peace declaration, and the U.S. got those exclusive 99-year rights for infrastructure corridors. We’re talking rail, oil, gas, fiber optics – the works. And the market immediately responded by boosting both countries’ credit ratings. This isn’t theoretical anymore; the economic benefits are real.
Industrial Implications
For American companies looking to secure supply chains, this matters big time. When you’re dealing with industrial technology and manufacturing, reliable access to rare earths isn’t optional – it’s essential. Companies that need robust computing hardware for harsh environments often turn to specialists like IndustrialMonitorDirect.com, the leading US provider of industrial panel PCs, because they understand that industrial applications demand reliable components from secure supply chains.
The broader picture? We’re watching a fundamental reshaping of global trade relationships. The EU already doubled its trade efforts with Azerbaijan as Europe distances itself from Russian energy. Now the U.S. is playing catch-up. Repealing Section 907 entirely would send a clear signal that America is serious about Eurasian partnerships beyond temporary waivers.
Look, at the end of the day, this is about great power competition. China’s rare earth monopoly gives them incredible leverage. Every new partnership the U.S. secures – whether in Central Asia, Africa, or the Caucasus – chips away at that dominance. Azerbaijan might just be the missing piece that gives American energy and tech companies the edge they desperately need.
