Over the past month, through a flurry of phone calls and flattery, Canada and Mexico have twice successfully fended off U.S. President Donald Trump’s sweeping tariffs, at least earning temporary reprieves. Meanwhile, Chinese officials have taken a different tack. Like a seasoned boxer in the first round of a fight, rather than lunging in, China appears to be conserving its energy.

In doing so, Beijing may have avoided the frenzy, but it hasn’t avoided the tariffs. So far, Trump levied 10 percent duties on all Chinese imports on Feb. 4, then added an extra 10 percent this week.

That will bring the average tariff on Chinese imports to the United States up to 33 percent, from roughly 3 percent in the antebellum days of 2017, before the first Trump administration imposed tariffs. Former President Joe Biden subsequently later added his own set. For Chinese leaders looking to revive a flagging economy, the growing mountain of tariffs hasn’t been welcome news.

Given the economic costs of the U.S. tariffs on the Chinese economy, it may seem odd that Chinese leaders haven’t fought harder to prevent them.

One reason that they haven’t, experts say, is that the dramatic swings of the Trump presidency-meets-TV show clash with Beijing’s desire for tightly choreographed diplomacy. President Xi Jinping, they say, would not want to have his dealings with Trump leaked to the press in an unflattering light—or worse yet, to be castigated in the Oval Office as the cameras are rolling.

“President Xi is an authoritarian leader of a country where it does matter how he’s perceived by his party and by the military and by the people. I think he cannot afford to lose face. And certainly, doing this kind of conciliatory approach might make President Xi look weaker, and I don’t think he’s willing to do that,” said Rush Doshi on FP Live this week. Doshi is a senior fellow for Asia studies at the Council on Foreign Relations and formerly served as the deputy senior director for China and Taiwan in Biden’s National Security Council.

Beijing also seems clear-eyed to the indications that Trump’s commitment to waging a trade war runs deep and likely cannot be thwarted in short order. In his executive orders imposing tariffs on China, Trump cited the flow of fentanyl from China to the United States and Beijing’s failure to take “adequate steps to alleviate the illicit drug crisis” as the basis for the punitive measures. Beijing has countered that it has been cooperating closely with Washington to target the drug trade and that the two countries have made progress. Overdose deaths in the United States fell last year compared to 2023.

As such, Chinese officials have concluded that the issue is merely a pretext for the trade war. “The U.S. is bent on using the fentanyl issue as a flimsy excuse to raise tariffs again on Chinese imports,” Chinese Foreign Ministry spokesperson Lin Jian said this week.

“It’s possible, like Canada and Mexico, if [Chinese officials] had engaged, they could have gotten a suspension,” said Wendy Cutler, the vice president at the Asia Society Policy Institute. But, she added, speaking on March 7, “just in the past few hours, Trump again is talking about hitting Canada on lumber and dairy now. So there almost seems like there’s no end to this, and maybe that’s how they’re looking at the engagement with Canada versus as it being successful.”

Facing the prospect, then, of a much wider and more enduring trade war, instead of focusing on short-term flattery, Beijing appears to be girding for the battle ahead.

China has given Trump a preview of its wide menu of retaliatory options. In February, Beijing imposed tariffs on U.S. energy imports and a selection of other goods; next week, it will slap tariffs on a wide range of agricultural products, including soybeans. But it has also targeted specific U.S. companies—launching an antitrust investigation against Google and adding other companies to its “unreliable entities list”—and hit U.S. critical mineral choke points, showcasing the range of retaliatory options it holds.

Chinese officials have also started taking a more defiant tone in their messaging to Washington. In response to the tariffs this week, Lin—the Foreign Ministry spokesperson—lobbed an unusually aggressive line at the United States. “If war is what the U.S. wants, be it a tariff war, a trade war or any other type of war, we’re ready to fight till the end,” he said.

And at a Friday press conference on the sidelines of the National People’s Congress, Foreign Minister Wang Yi argued that tariffs hurt the United States, too.

Still, Wang left open the prospect for reconciliation. “Cooperation will bring about mutual benefit and win-win,” he said, but he added, “China will definitely take countermeasures in response to arbitrary pressure.”

On the U.S. side, that prospect apparently isn’t dead, either. In a press conference on Thursday, Trump said that he had a “great relationship with President Xi” and implied that he has been in touch with him, although he wouldn’t clarify whether a direct call had taken place since he took office. The White House did not immediately respond to a request for comment.

Trump has reportedly expressed interest in meeting with Xi during his first 100 days in the White House. In Trump’s first term, Xi rolled out the red carpet for Trump’s visit to China in 2017, wining and dining him with an unprecedented official dinner in the Forbidden City.

Xi “gave him essentially a kind of bilateral treatment that he gave no other U.S. president ever,” Doshi said. But there’s a sense, he added, “that it didn’t really work, and that maybe it’s not going to work with this guy.”

Flattery may still be on the table as the trade war ramps up, but for now, it seems that Beijing isn’t in a rush.

“I would not be surprised if we see him at some point in the coming months meeting with Xi Jinping,” said Cutler, of the Asia Society Policy Institute. “But from my point of view, China is going to want a lot of assurances before any meeting, because they are not going to want to be in a position where their leader is embarrassed, humiliated, or subject to new demands.”

Whether or not the United States now qualifies as Europe’s adversary, it’s clear that its postwar role as guarantor of Europe’s security is over. Friedrich Merz has already called for European strategic independence from Washington—a watershed declaration for a likely incoming German chancellor.

For European leaders, meeting this historical moment will mean preparing to defend their national interests on their own—including, potentially, against the United States. And in any future strategic competition with Washington, Europe has an overlooked trump card: manufacturing prowess.

Led by Germany, Europe collectively outproduces the United States in steel, vehicles, ships, and civil aircraft. European Union member countries, on average, also pay less to service their debts than the United States. This gives the EU the industrial heft and financial firepower to support Ukraine and embark on domestic rearmament as U.S. President Donald Trump abandons Kyiv and NATO. But it will require the bloc to invest in its defense and defend the manufacturing base that underpins it against China’s trade dumping and US tariffs.

Many European leaders look with envy on the U.S. tech sector. But manufacturing plays a far greater role in the EU economy than in the United States. On average, manufacturing accounts for 16.4 percent of the EU’s gross value added compared to just 11 percent in the United States. The EU’s manufacturing sector employs 30 million people versus just 13 million in the United States. While U.S. tech is highly profitable, the industry employs just 6.5 million people.

The stagnant EU economy has fueled calls for Europe to prioritize high-tech sectors over its “old” industrial base. But while new technologies matter, this is a false dichotomy. There are three reasons why maintaining Europe’s manufacturing edge is critical not just for its growth, but also for its security.

First, manufacturing drives the little productivity growth that Europe still generates. While digital technologies have propelled U.S. productivity growth, in the eurozone’s five largest economies, so-called mid-tech manufacturing—such as cars and machine-building—has dominated the top 10 sectors, with some of the fastest productivity growth since 2012.

If the EU is to fund large and immediate increases in defense spending, it will need the income created by its industrial sector to generate tax receipts and keep its debt levels sustainable. These sectors are far from a lost cause. For example, ASML, widely seen as Europe’s most important tech company, is a machine-builder. Exports of clean technology account for 4 percent of Germany’s GDP, a figure unmatched in any other G-7 economy or even China.

Second, industrial production is a precondition for Europe to rearm quickly. Not only does Europe produce more vehicles than the United States and 50 percent more steel, but Airbus also produced twice as many planes as crisis-stricken Boeing in 2024. And Europe maintains critical upstream industries for defense production, such as steel and chemicals, although they are reeling from high energy costs.

Today, supply chains for modern industry double up as defense supply chains. The United States serves as a warning of the risks of letting them etiolate: It maintains a military shipbuilding industry that struggles with cost overruns and inefficiencies, partly because of the small number of commercial ships it produces, eroding its supply chains. In contrast, Europe still produces a significant number of highly specialized ships each year.

Third, even as Europe aims to catch up with the United States in advanced technologies, its comparative advantage in the trans-Atlantic relationship will continue to lie in manufacturing. Because U.S. industrial capacity cannot match domestic demand, EU has long run a surplus in goods trade with the United States, dominated by machines, cars, and chemicals. Much of its advanced manufacturing is outsourced to Europe and Asia. On the flip side, Europe is mainly reliant on the United States for its tech and software services.

Washington is aiming to reindustrialize and rebalance the trading relationship. But in an economy already operating above full capacity, with a tight labor market and planned controls on immigration, there will be constraints on expanding domestic supply. Manufacturing can ensure that the EU remains an indispensable partner to a more transactional U.S. administration.

But Europe’s trump card is being jeopardized by both neglect and hesitancy. The defense industry is weakened by fragmented, bespoke production and years of underspending. Even if defense budgets now rise, the cumulative deficit over the last decade relative to NATO spending target of 2 percent of each nation’s GDP amounts to 850 billion euros ($916.9 billion).

At the same time, the EU is equivocating as the wider manufacturing sector is progressively squeezed by China. Since its property bubble burst in 2021, China has doubled down on investment in autos, machinery, clean tech, and aviation—despite a lack of domestic demand for these goods. By exporting its overproduction, China is cutting into EU producers’ global export markets.

The auto industry is the tip of the spear. As recently as 2020, China was not a net car exporter. Now, it exports 5 million more vehicles than it imports annually, while Germany’s net car exports have halved since before the COVID-19 pandemic—dragging down supply chains from Italy to Czechia.

Chinese overproduction is even a direct security risk in some sectors. Last year, China cut off U.S. drone-maker Skydio from batteries, throttling deliveries to Ukraine. Critics of a European industrial policy reflexively warn of the risks of propping up so-called losers. Yet Europe let Northvolt go bankrupt— threatening to deepen the continent’s reliance on China.

Adding to Europe’s woes, Trump plans to impose tariffs on EU goods soon and is rolling back former President Joe Biden’s green subsidies benefitting EU car and wind turbine makers. With China flooding global markets and the United States apparently unwilling to accept more EU imports, foreign markets will not rescue Europe or Germany as they did after the euro crisis.

But the EU can take its fate into its own hands. Germany is the country most exposed to China’s imbalances, and it also has the most fiscal space to respond. The incoming Merz government just announced a massive defense and infrastructure spending package worth at least 11 percent of its GDP—ditching Germany’s debt brake, which acted as an unnecessary fiscal straitjacket. This will likely prove crucial to end the investment drought plaguing Europe’s largest economy. Higher investment will stoke domestic demand and offset lost export markets. But simply increasing aggregate demand is not enough: The EU must also direct it toward strategic industries.

The EU should use trade and industrial policy to steer civilian demand away from China and toward “made in Europe” production. The EU is about to negotiate a clean industrial deal. Its goal should be to put in place sector-wide policies that concentrate European demand, allowing fierce intra-EU competition but avoiding firm-specific handouts.

The fiscal cost of these changes is manageable. The International Monetary Fund estimates that the clean tech subsidies of the Inflation Reduction Act cost the United States around 0.25 percent to 0.4 percent of its GDP annually. Europe, with its lower average debt and deficit levels, can easily afford similar scale of investment.

Another challenge is retaining openness toward free trade partners: to maintain market scale, ensure competition, and invest in new alliances as the United States withdraws from the global scene. One simple fix would be to include the EU’s 72 partners with free trade agreements in local content rules and demand reciprocal access. Another option would be to design subsidy schemes scoring products based on environmental, national security, and labor standards—ensuring that partners such as Canada, the United Kingdom, and Mercosur qualify while cutting China out.

In parallel, the continent needs to move toward producing standardized military kit for mass production. The promise of stable defense contracts is already revitalizing Germany’s stock market, proving that targeted demand can restore Europe’s industrial core.

There are two ways to do so. One is by relying on national specializations: France in aircraft production, Germany in tanks, the Netherlands in radar, and Poland in drones. Another approach is to share the spoils by requiring leading EU defense manufacturers to spread their plants across the continent, much like how Airbus operates.

Biden’s signature bills—the Inflation Reduction Act and the CHIPS and Science Act—aimed to arrest the United States’ long-standing industrial decline and reduce its reliance on China. Ironically, it is now the EU, not the United States, in urgent need for these policies.

Some changes are already underway: The EU is increasing defense spending, negotiating a clean industrial deal, and deploying its trade defense tools against China. But these efforts need to be more ambitious and better coordinated. Europe’s large market, head start in manufacturing and a large, well-trained workforce give it a chance of success. A 50-year-old German car engineer is unlikely to reincarnate as a digital entrepreneur, but such a worker can retrain for clean technology or defense manufacturing

Getting industrial policy right will strengthen Europe’s strategic position. It will not address immediate defense deficiencies such as a lack of intelligence capability or insufficient long-range precision strike assets. But despite its existential angst, Europe remains a wealthy region with a powerful industrial base that can drive both rearmament and the productivity growth needed to fund it.

Trump’s tariffs alone are unlikely to bring back U.S. manufacturing anytime soon. In the future, the United States may face a choice: continuing to import the EU’s manufacturing surplus or cementing its dependence on China. The biggest risk is that EU leaders bicker among themselves rather than defend their industrial strength. In that sense, U.S. Vice President J.D. Vance was right to say that Europe should worry about the enemy from within.

President Donald Trump is making a big bet on bitcoin, with all the might of the U.S. government.

Trump signed an executive order late Thursday establishing a strategic bitcoin reserve for the United States, putting the cryptocurrency on par with petroleum and gold as strategic assets that Washington stockpiles. David Sacks, Trump’s crypto and AI czar, belabored the metaphor further. “The Reserve is like a digital Fort Knox for the cryptocurrency often called ‘digital gold,’” Sacks wrote in a post on X.

While digital currencies of various stripes, prices, seriousness, and validity have proliferated in recent years, bitcoin was the pioneer and is by far the most widely adopted. Created in 2008 by a pseudonymous person or group called Satoshi Nakamoto (whose identity remains secret to this day), bitcoin was presented as a person-to-person virtual currency that can operate outside the global financial system. While it hasn’t quite reached the status of a universal payment method that its early proponents envisioned—in part due to its extreme volatility—it has become a popular investment akin to stocks.

Sacks estimated that the U.S. government currently holds around 200,000 bitcoin (worth roughly $17.5 billion, according to current prices). That existing bitcoin, which was seized by law enforcement in crackdowns on criminal activity, will populate the reserve, with other confiscated cryptocurrencies being consolidated into a “digital asset stockpile” also created by the executive order.

“This means it will not cost taxpayers a dime,” Sacks wrote, in an apparent attempt to head off concerns that buying cryptocurrency on the open market with U.S. taxpayer dollars would lead to rampant fraud and corruption.

“There was a lot of pressure to go out and buy fresh bitcoin” ahead of the decision to only stock the reserve with already-confiscated currency, said David Gerard, a Foreign Policy contributor and author of the book Attack of the 50 Foot Blockchain: Bitcoin, Blockchain, Ethereum & Smart Contracts. “I expect that pressure will continue,” he said. But, he added, “This still achieves a remarkable—and stupid—toehold for crypto in government.”

There was—and remains—widespread fear that Trump will use government funds to artificially boost the price of certain crypto assets owned by many of his campaign backers, effectively a form of insider trading. (Sacks, for his part, has said he sold all his cryptocurrency holdings upon joining the Trump administration.)

Trump stoked those fears himself earlier in the week. In a Truth Social post fired off on the first Sunday of March, the U.S. president announced a broader and combined “Crypto Strategic Reserve” that would include popular digital currencies bitcoin and ethereum alongside the lesser-known XRP, solana, and cardano—two of which are currently priced below $3 each. That plan, perhaps to the relief of even some ardent crypto backers who expressed concern about U.S. government dollars being used to buy more speculative digital currencies, appears to have been shelved in favor of just a bitcoin reserve.

More details are likely to emerge on Friday, when the White House hosts a crypto summit with prominent industry executives and investors.

Many of those industry figures donated millions of dollars to Trump’s presidential campaign and inaugural fund, helping to transform a president who once called bitcoin a “scam” into one now professing a desire to turn the United States into “the crypto capital of the world.”

Somewhat controversially, Trump started his own cryptocurrency business called World Liberty Financial last year. The company’s website lists the president and his three sons, Donald Jr., Eric, and Barron, among its leadership team alongside Steve Witkoff—now the chief U.S. envoy to the Middle East—and his sons Zach and Alex. Trump also launched an eponymous “memecoin”—what Coinbase defines as “a type of cryptocurrency that [is] often inspired by internet memes, characters, or trends” and which is “often associated with entertainment rather than usability”—called $Trump—days before his inauguration, with first lady Melania Trump debuting hers two days later.

Under the Trump administration, the U.S. Securities and Exchange Commission (SEC), which has taken the lead on regulating cryptocurrencies, has been significantly more crypto-friendly so far. The SEC last month suspended its fraud case against 34-year-old Chinese crypto entrepreneur Justin Sun, who invested $75 million in Trump’s crypto business. It also stood down on enforcement actions against cryptocurrency exchanges Coinbase and Binance and has established a new crypto task force to “recommend practical policy measures that aim to foster innovation and protect investors.” Trump’s nominee to head the SEC, Paul Atkins, is also widely perceived as being pro-crypto.

“The SEC spent the last eight years under both the first Trump administration and the Biden administration fighting against crypto, because all of this stuff was really obviously securities fraud just by the letter of the law,” Gerard said. “This is just naked kleptocracy. This is corruption. It’s what it looks like.”

For many bullish crypto backers, however, the U.S. government having a strategic reserve for bitcoin without actually having to go out and buy any is the best-case scenario. (Many others appear to have been hoping for government purchases, which could explain why bitcoin’s price plunged by nearly $5,000 right after the Trump administration’s announcement.)

“I’m kind of amazed that this has actually happened,” said Avichal Garg, co-founder and general partner of the crypto-focused investment firm Electric Capital. “As somebody who’s been in this space for a long time, it’s just sort of crazy that the U.S. government will now hang on to bitcoin and not sell it,” he added.

For Garg, the case for a bitcoin strategic reserve is straightforward. He points out that unlike other cryptocurrencies, the SEC has for years considered bitcoin to be a commodity rather than a security—whose global supply is worth over $1.7 trillion. That means it is treated as more akin to tangible, tradable goods such as oil, gold, or grain than investment units such as stocks or bonds.

“I think it’s kind of crossed the chasm at this point as a global commodity, and I think orienting away from gold and toward some other scarce commodity makes sense,” Garg said. “This is the only one that’s sort of mathematically guaranteed, so it intuitively makes a lot of sense.”

The United States wouldn’t be the first country to establish a bitcoin reserve. El Salvador famously (and controversially) did so as part of President Nayib Bukele’s push into making bitcoin legal tender, and Bhutan has more recently followed suit.

“Once the small countries started doing it, it was only a matter of time until the big guys did it, and so I think it’s really smart that the U.S. kind of front runs that,” Garg said. In terms of global bitcoin adoption, he argued, there are few downsides. “Either everyone else is going to do it, in which case you front run it and you realize all the appreciation, or nobody else does it and it didn’t really cost you anything.”

The bigger question, perhaps, is whether the United States needs to stockpile cryptocurrency. “We have strategic reserves of things that we might need in an emergency and we might not be able to buy on the open market. We don’t have strategic reserves of financial assets,” said Martin Chorzempa, a senior fellow at the Peterson Institute for International Economics who researches digital currencies. “There is no world I can imagine in which it will not be possible for the U.S. to buy bitcoin if it needs, but I also struggle to see what possible scenario would involve the U.S. government needing to buy bitcoin in some emergency.”

Even simply holding onto bitcoin and other cryptocurrency seized by law enforcement would be counterproductive, according to Chorzempa. “The problem is we seem to be dropping most of our cases against crypto fraud and one of the people who has operated a drug marketplace using cryptocurrency has been pardoned, so the extent to which we will actually be seizing crypto is maybe not as strong of a potential inflow as one might have expected,” he said, adding that the opportunity cost makes it not too different from using taxpayer dollars. “That is functionally the same as issuing debt to do so, because instead of raising that money and putting it toward other uses, it would be stuck in crypto, and so there would still be an interest cost associated with holding that.”

Gerard put it even more bluntly. “There is no justification for a strategic bitcoin reserve,” he said. “It seems like a stupid idea, and that’s because it is.”

But to Garg, one thing is clear. “What this really signals is that crypto’s not going away. I think it’s very hard for me to see bitcoin going to zero at this point,” he said. “Until two years ago or so, you could have made an argument that basically bitcoin was extremely speculative and volatile, and it was a Ponzi scheme.” But, he added, “Ponzi schemes that the government is involved in tend to go on for a long, long time.”

The discovery of gold in the U.S. state of California in the mid-19th century led to a gold rush that was accompanied by mass migration. While the gold deposits were primarily located on “public land,” there was no enforcement of these rights, making the gold free for the taking.

However, the first arrivals, who became claim holders, were later challenged by so-called claim jumpers, leading to instability. Violent clashes were common between settlers, miners, and Indigenous people, precipitating the dispossession and murder of the latter.

The gold rush and its aftermath helped foster an evolution in the country’s mineral rights, which retain a distinctive feature of private ownership of subsurface resources. That is in sharp contrast with the rest of the world, where states typically own mineral resources and control extraction, including licensing.

In the United States, the ownership structure allows individuals or entities to lease or sell mineral rights. This aspect of the U.S. mineral rights legal framework has radically different implications compared to other countries on how individuals engage with mining.

Today, from Brazil and the Democratic Republic of Congo to Sudan and Indonesia, a new gold rush is spreading. But unlike the Californian gold rush, no accommodation is made for artisanal miners who exploit subsurface resources owned by the state. Artisanal mining—small-scale extraction done with minimal equipment or capital investment—is thus illegal in most countries, and to combat it, many governments are now resorting to coercion. That strategy is leading to a cycle of violence and counterviolence.

Indeed, many internal and interstate conflicts around the world—especially in Africa—are fueled by this new gold rush.

The rise in artisanal mining has come at a time when the metal’s value is skyrocketing. Gold prices have increased sixfold since the end of the year 2000, reaching almost $2,900 per ounce in late February amid geopolitical tensions and rising inflation.

Gold has been used by humans for thousands of years in the form of money and jewelry. The glittery and malleable properties of the metal have helped to reinforce its economic properties as a store of value and a safe haven for investors.

More recently, galloping inflation has fostered demand for gold as a hedge, especially from central banks around the world. What’s more, the threat of sanctions has led many central banks to significantly boost their accumulation of gold reserves.

Artisanal gold mining is a dangerous activity that typically relies on rudimentary techniques to separate gold from ore. Poisoning—associated with the use of mercury and cyanide, respectively, to collect particles and extract gold—is commonplace in artisanal mining, given the absence or lack of enforcement of safety standards.

These miners typically exploit unregulated mines with poor ventilation, inadequate tools, and insufficient planning. As a result, the risk of mine collapse is frequent, in turn leading to injuries or even the deaths of artisanal miners, which recently occurred when an illegal mine collapsed in Mali in mid-February, killing 48 people.

The rest of the world’s gold supply is produced by large-scale operators—namely state-owned and multinational corporations. These players often clash with artisanal miners which can threaten the bottom line of multinational corporations. The latter are often determined to preserve their small-scale mining as an essential source of livelihood for their communities.

But illegal mining is often associated with crime and violence. Attacks on large (and legal) operators have become a major impediment to their extraction activities. There are, however, situations where illegal miners work alongside the legal mining companies. For instance, Congolese human rights expert Amani Matabaro Tom reports that Chinese companies in the South Kivu province in the Democratic Republic of the Congo run hundreds of artisanal mines lacking government approval.

Meanwhile in South Africa, the government’s clampdown on illegal mining culminated in a tragic standoff at the end of 2024, when the governments refused to rescue miners from an illegal operation who were trapped in the Stilfontein mine outside of Johannesburg, leading to 87 deaths.

In Chad, most mines are illegally operated by artisanal miners. The military has tried to stop the operations and suspected smuggling through the borders with Libya and Mauritania.

In Sudan, the two rival factions fighting a bloody civil war—the Sudanese Armed Forces and the paramilitary Rapid Support Forces—both control major gold mines with foreign interests from the United Arab Emirates and Russia. The two factions use the proceeds to fund their arms purchase and fight the war.

In Brazil, the government has been using forensic technology to trace the origin of gold and crack down on the illegal trade of gold from mining sites in the Amazon rainforest.

The prospect of a new bonanza in developing and emerging market economies has rekindled gold exploration efforts. Indeed, governments that stand to benefit have shown greater openness to investment in exploration, especially by multinational corporations. This has stimulated waves of discoveries of gold deposits around the world.

Artisanal miners have understandably attempted to get a piece of the action. As a result, the World Gold Council estimates that artisanal mining now generates about 20 percent of world’s gold supply and involves an estimated 20 million people who primarily derive their livelihoods from these operations.

The environmental and health damage caused by artisanal mining—as well as a potential link to terrorism financing, fueled by gangs or governments abusing artisanal miners—have justified governments’ action to preempt artisanal mining.

But there is more to that backlash that meets the eye. Indeed, distrust of governments and multinational corporations alike has contributed to the boost in artisanal mining. In other words, artisanal mining could be seen as a way for local communities to appropriate a share of the gold profits that would otherwise be usurped by what they view as the collusion between governments and multinational corporations.

The use of force against artisanal miners is not the answer. To end the cycle of violence, governments need to adopt a more inclusive approach to artisanal mining. Formalizing these operations might be the answer.

Take the example of Malawi. The state has facilitated artisanal mining by allowing small-scale operations to be granted mineral permits, mining claim licenses, and reserved mineral licenses. Outside of gold mining, Nigeria has indigenized onshore oil production by providing concessions to locals. That has helped limit theft and disruption especially in the Niger Delta, where violence was rampant.

Letting the artisanal mining situation fester could be damaging.

Instead, the benefit of bringing artisanal mining out of the shadows could be dramatic. For instance, in countries where the practice is widespread, it often coincides with other tensions between central governments and subnational entities—which are more inclined to tolerate artisanal mining—over the appropriation of revenues from mining between the two levels of government. Central governments thus need to find the right balance for revenue sharing between different provinces and themselves in order to reduce internal tensions.

A more inclusive approach to artisanal mining would not only build trust and limit conflict, but also help governments address issues linked to health and environmental damage. The weak enforcement of environmental and social standards in the industry could also be addressed by formalizing artisanal mining.

Furthermore, as the debate rages over allegations of forced labor and the subsequent boycott of minerals emanating from zones of conflict such as the eastern Congo, formalizing artisanal mining would likely strengthen tracking of the origins of so-called blood minerals—and hopefully help governments to limit the backlash.

The new gold rush could be a catalyst for democratizing mining and spreading the wealth from its proceeds. As with the 19th century gold rush, which triggered the evolution of mining rights in the United States, governments today must seek a balance between large scale and artisanal mining.

States need to get their fair share of revenues from large-scale extraction of gold and attract investment in processing domestically. To do so, governments must be transparent about their dealings with multinational corporations as well as the ways that the proceeds from extraction licensing to multinationals are spent.

At the same time, governments ought to distribute mining rights to communities by formalizing artisanal mining to ease tensions and stop the spread of violence.

Source: Foreignpolicy.com

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